Venus Concept Inc. (NASDAQ:VERO), a medical technology company specializing in surgical and medical instruments, has entered into a significant amendment agreement with its lenders and announced the departure of a board member, according to a recent 8-K filing with the U.S. Securities and Exchange Commission.
The Toronto-based company, which operates under the name 08 Industrial Applications and Services, disclosed that on Monday, it reached a loan amendment and consent agreement with Madryn Health Partners, LP, and Madryn Health Partners (Cayman Master), LP.
This agreement provides financial flexibility by waiving certain liquidity requirements through the end of December 2024, applying the cash interest payment due on December 8, 2024, to the outstanding principal balance of each note, and deferring the December 2024 principal payment to maturity. InvestingPro analysis shows the company carries a substantial debt burden of $38.35 million, with a concerning debt-to-equity ratio of 3.79.
Additionally, Venus Concept announced the resignation of Dr. Garheng Kong from the Company’s board of directors and the Nominating and Corporate Governance Committee, effective Sunday. The company stated that Dr. Kong's departure was not due to any disagreements with Venus Concept's operations, policies, or practices.
The company has also secured additional bridge financing from its lenders, increasing the commitment from $3 million to $6 million and extending the maturity date from November 30, 2024, to December 31, 2024. Venus Concept received a drawdown of $1.2 million on Tuesday following the amendment, with the intention to use the funds for general working capital purposes after covering transaction expenses.
These financial maneuvers come as Venus Concept continues to navigate the challenges of the medical technology market. The company's efforts to restructure its debt obligations and secure additional funding reflect a strategic approach to maintaining operational stability and investing in future growth.
With a market capitalization of just $2.25 million and a stock price decline of over 78% in the past year, investors seeking deeper insights can access the comprehensive analysis available through InvestingPro, which offers detailed financial health metrics and 12 additional ProTips for this stock.
In other recent news, Venus Concept Incorporated reported a decrease in revenue for the third quarter of 2024 during its earnings call. A 15% year-over-year decline was noted, with revenue amounting to $15 million. This was primarily driven by a 23% drop in U.S. revenue, while international sales remained stable. The company also revealed a significant reduction in operational cash use and debt, alongside an extension from NASDAQ to meet minimum bid price requirements.
Despite these challenges, Venus Concept is planning strategic shifts and product launches aimed at revitalizing growth. The company's debt was significantly reduced from $46 million to approximately $34.6 million. New product launches are planned for the first quarter of 2025 in Australia and the U.S.
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