Venus cept (US:VERO)2025-11-13 12:16Financial Performance - As of September 30, 2025, the company reported an accumulated deficit of $355.5 million, up from $308.9 million as of December 31, 2024[217]. - For the three months ended September 30, 2025, the Company reported revenues of $13.8 million, a decrease of 8% compared to $15.0 million for the same period in 2024[256]. - For the nine months ended September 30, 2025, revenues were $43.1 million, down 12% from $49.1 million in the same period of 2024[256]. - The net loss attributable to the Company for the three months ended September 30, 2025, was $22.6 million, compared to a net loss of $9.3 million in 2024[256]. - The net loss attributable to the Company for the nine months ended September 30, 2025, was $46.7 million, compared to a net loss of $39.0 million in 2024[256]. - Adjusted EBITDA loss for the three months ended September 30, 2025, was $7.8 million, compared to a loss of $5.9 million in 2024[256]. - Adjusted EBITDA loss for the nine months ended September 30, 2025, was $25.0 million, compared to a loss of $15.1 million in 2024[256]. - Total revenue decreased by $1.2 million, or 8.2%, to $13.8 million for the three months ended September 30, 2025, compared to $15.0 million for the same period in 2024[300]. - Total revenue decreased by $6.0 million or 12.1%, totaling $43.1 million for the nine months ended September 30, 2025[312]. - Gross profit decreased by $1.1 million, or 11.1%, to $8.8 million in the three months ended September 30, 2025, with a gross margin of 64.0% compared to 66.1% in the prior year[303]. - Gross profit decreased by $6.4 million or 19.2%, resulting in a gross margin of 62.6% for the nine months ended September 30, 2025[315]. Cash and Financing - The company had cash, cash equivalents, and restricted cash of $5.9 million as of September 30, 2025, compared to $4.3 million as of December 31, 2024[217]. - The company plans to fund operations and capital expenditures through cash on hand, borrowings, and capital stock issuances until profitability is achieved[217]. - The company has entered into multiple private placements, including a 2023 Multi-Tranche Private Placement with a total potential of $9.0 million[225]. - The company has drawn down a total of $7.9 million from a Loan and Security Agreement as of December 31, 2024, with additional draws of $15.3 million from January 27, 2025, to September 30, 2025[239]. - The Company expects to use proceeds from the 2023 Multi-Tranche Private Placement, totaling $9.0 million, for general working capital purposes[335]. - The 2022 Private Placement generated gross proceeds of $6.7 million before offering expenses, with costs totaling $0.2 million[334]. - The Company issued $2.0 million in 2024 Notes, accruing interest at 90-day adjusted SOFR + 8.5% per annum, convertible at an initial price of $13.761 per share[329]. - The Madryn Loan and Security Agreement includes a term loan of $2.2 million and delayed draw term loans of up to $26.0 million[331]. - The Company has financed operations through the issuance of common and preferred stock, debt financing, and customer payments[345]. - The Company anticipates that existing cash and proceeds from various financing agreements will fund operations for at least the next 12 months[346]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $18.5 million, significantly higher than $6.4 million in 2024[351]. Operational Challenges - The company has incurred recurring net operating losses and negative cash flows from operations, indicating ongoing financial challenges[217]. - The company is facing economic uncertainties due to volatility in the global economy, including inflation and rising interest rates[218]. - Revenue decline in the first half of 2025 was attributed to tightening credit markets and economic uncertainty, affecting customers' ability to secure financing[267]. - Supply chain issues were experienced due to shipment delays from the Israel-Hamas and Israel-Iran conflicts, impacting production lead times[270]. - The company experienced a decrease in net operating assets of $3.5 million for the nine months ended September 30, 2025, primarily due to an increase in accrued expenses[352]. Sales and Market Performance - The total number of systems delivered in the three months ended September 30, 2025, was 198, a decrease of 22% from 253 systems delivered in the same period of 2024[263]. - The total number of systems delivered in the nine months ended September 30, 2025, was 630, down 20% from 789 systems delivered in the same period of 2024[263]. - Approximately 30% of aesthetic system revenues were derived from internal lease programs for the nine months ended September 30, 2025[250]. - Traditional sales accounted for approximately 62% of total system revenues for both the three and nine months ended September 30, 2025, compared to 61% and 59% in 2024[277]. - Distributor sales represented approximately 11% and 8% of total system revenues for the three and nine months ended September 30, 2025, down from 16% and 13% in 2024[281]. - Approximately 27% and 30% of total system revenues for the three and nine months ended September 30, 2025, were derived from internal financing programs, up from 23% and 28% in 2024[276]. Expenses and Losses - Operating expenses increased by $1.2 million, or 7.2%, to $18.3 million for the three months ended September 30, 2025, representing 132.9% of revenues[304]. - Loss from operations was $9.5 million for the three months ended September 30, 2025, compared to a loss of $7.2 million in the same period of 2024[298]. - The company recognized a $1.0 million non-cash loss from the March 2025 debt extinguishment, a $1.9 million loss from the June 2025 exchange, and an $11.3 million loss from the September 2025 exchange[294]. - The company recorded a loss on extinguishment of debt of $14.2 million for the nine months ended September 30, 2025[352]. - Bad debt expense for the three and nine months ended September 30, 2025, was $0.3 million and $2.6 million, respectively, compared to $0.4 million and $0.9 million for the same periods in 2024[266]. Future Outlook and Strategy - The company is expanding its ARTAS hair restoration business and robotics offerings through the AI.ME™ platform, targeting both traditional and non-traditional markets[216]. - The company plans to introduce and commercialize new products to grow revenues and penetrate new markets, which may increase expenses[348]. - Research and development expenses are expected to increase in absolute dollars as the company continues to invest in new products and technologies[291]. - The company launched the Venus Prime program in January 2024, replacing its legacy subscription program, aimed at improving cash generation and reducing exposure to defaults[251]. - The allowance for expected credit losses is based on the assessment of collectability and aging of customer accounts, reflecting the company's risk management strategy[368].