Venus Concept Announces $11 million Debt-to-Equity Exchange Transaction

Rhea-AI Summary

Venus Concept (NASDAQ: VERO) has executed a significant debt-to-equity exchange transaction with Madryn Asset Management. The company converted $11.0 million of subordinated convertible notes into 379,311 shares of Series Y preferred stock on March 31, 2025.

This strategic move has substantially improved Venus Concept's financial position, reducing its total debt obligations to approximately $35.5 million. This represents a 54% reduction from $76.7 million as of March 31, 2024, and an 11% decrease from $39.7 million as of December 31, 2024.

The transaction is part of Venus Concept's ongoing efforts to optimize its capital structure and create additional balance sheet flexibility, supporting the company's journey toward sustained, long-term growth and profitability.

Positive

• Significant debt reduction of 54% year-over-year, from $76.7M to $35.5M
• Improved balance sheet flexibility through debt-to-equity conversion
• Strategic partnership commitment from major investor Madryn Asset Management

Negative

• Potential shareholder dilution from conversion of debt to 379,311 preferred shares

Insights

Financial Restructuring Analyst

Venus Concept's $11 million debt-to-equity conversion represents a significant deleveraging milestone in the company's financial transformation. By exchanging subordinated convertible notes for preferred equity, Venus has reduced its total debt obligations to approximately $35.5 million - marking a substantial 54% reduction from March 2024 levels and continuing the 11% decrease from year-end 2024.

This transaction materially improves Venus Concept's financial flexibility by reducing interest expenses and debt service requirements. For a smaller-cap medical aesthetics company with approximately $1.8 million market capitalization, relieving $11 million in debt obligations creates meaningful breathing room for operational initiatives. The deleveraging also improves key financial ratios that investors and potential partners monitor.

Particularly noteworthy is Madryn's willingness to increase their equity position rather than demand repayment. This signals confidence in Venus Concept's transformation strategy and potentially indicates Madryn sees greater upside in equity participation than continued debt collection. The transaction creates a more sustainable capital structure that should support the company's stated journey toward profitability.

While this balance sheet restructuring doesn't directly generate revenue, it removes a significant financial constraint that could impede Venus Concept's strategic flexibility and potentially accelerates their timeline to positive cash flow. Investors should now focus on whether management can translate this improved financial foundation into sustainable operational performance.

Equity Capital Markets Specialist

This $11 million debt-to-equity conversion fundamentally strengthens Venus Concept's financial position while preserving cash resources. The transaction converts 28% of the company's previous $39.7 million debt load (as of December 2024) to preferred equity in a single transaction, dramatically accelerating their deleveraging timeline without depleting operational cash.

The structure using Series Y preferred shares rather than common stock is strategically significant. Preferred equity typically sits between debt and common equity in the capital structure, providing Madryn potential equity upside while likely maintaining certain investor protections. While dilutive to the ownership percentage of common shareholders, this structure may be less immediately dilutive to earnings per share than a common stock issuance would have been.

Madryn's continued partnership and willingness to restructure demonstrates institutional support that extends beyond typical creditor relationships. Their Managing Partner's reference to Venus having "improved the business operationally" and their endorsement of the "new product roadmap" suggests sustained confidence in management's execution capability.

For investors, this restructuring fundamentally changes Venus Concept's risk profile by reducing fixed payment obligations and creating additional financial runway. The medical aesthetics industry requires continuous innovation and marketing investment - this balance sheet reconfiguration should allow management to allocate more resources toward growth initiatives rather than debt service, potentially improving competitive positioning in their market segment.

Continued improvement of the Company’s financial position through additional reduction of outstanding debt by Madryn Asset Management

TORONTO, April 01, 2025 (GLOBE NEWSWIRE) -- Venus Concept Inc. (“Venus Concept” or the “Company”) (NASDAQ: VERO), a global medical aesthetic technology leader, announced today that, on March 31, 2025, the Company exchanged $11.0 million of its subordinated convertible notes held by affiliates of Madryn Asset Management, LP (“Madryn”) for 379,311 shares of its Series Y preferred stock. Following the transaction, the Company had total debt obligations of approximately $35.5 million, down 54% from $76.7 million outstanding as of March 31, 2024, and down 11% from $39.7 million outstanding as of December 31, 2024.

“Yesterday’s transaction builds upon our on-going efforts to optimize the capital structure of the company, with an additional debt exchange that further reduces our debt balance,” said Rajiv De Silva, Chief Executive Officer of Venus Concept. “This creates additional flexibility in our balance sheet as we continue the journey towards sustained, long-term growth and profitability. The transaction could not have been accomplished without Madryn’s continued commitment to the partnership with Venus.”

“We believe Venus has improved the business operationally through its transformation plan and the debt conversion reflects our support of the Company’s journey,” said Avinash Amin, MD, Managing Partner at Madryn Asset Management, LP. “We look forward to the next phase of the Company’s evolution with the strengthened balance sheet and new product roadmap.”

Cautionary Statement Regarding Forward-Looking Statements

This communication contains “forward-looking statements” 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 we operate, as well as 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, the Company’s ability to achieve its strategic goals and return to profitability, as well as those risks and uncertainties described under Part I Item 1A—“Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Readers 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, we do 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 10 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, Masters Special Situations, and Madryn Asset Management, L.P.

Investor Relations Contact:

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

Investor Relations Contact:

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

FAQ

How much debt did Venus Concept (VERO) convert to equity in March 2025?

Venus Concept converted $11.0 million of subordinated convertible notes into 379,311 shares of Series Y preferred stock.

What is Venus Concept's (VERO) total debt after the March 2025 debt exchange?

Following the transaction, Venus Concept's total debt obligations were approximately $35.5 million.

How much has Venus Concept (VERO) reduced its debt since March 2024?

Venus Concept has reduced its debt by 54%, from $76.7 million in March 2024 to $35.5 million.

Who was the counterparty in Venus Concept's (VERO) debt-to-equity exchange?

The debt-to-equity exchange was conducted with affiliates of Madryn Asset Management, LP.