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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 001-38238

Venus Concept Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

06-1681204

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

235 Yorkland Blvd., Suite 900

Toronto, Ontario M2J 4Y8

(877) 848-8430

(Address including zip code, and telephone number including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		VERO		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 7, 2025 the registrant had 1,859,123 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

Table of Contents

		Page
Part I.	Financial Information	2
Item 1.	Condensed Consolidated Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	57
Item 4.	Controls and Procedures	57
PART II.	Other Information	58
Item 1.	Legal Proceedings	58
Item 1A.	Risk Factors	58
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	61
Item 3.	Defaults Upon Senior Securities	62
Item 4.	Mine Safety Disclosures	62
Item 5.	Other Information	62
Item 6.	Exhibits	62
Signatures		65

Table of Contents

PART I

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

VENUS CONCEPT INC.

Condensed Consolidated Balance Sheets

(Unaudited)

_{(in thousands, except share and per share data)}

	*September 30,*			*December 31,*
	*2025*			*2024*
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,312		$	4,271
Restricted cash		1,619			—
Accounts receivable, net of allowance of $1,778 and $3,402 as of September 30, 2025, and December 31, 2024, respectively		16,503			18,721
Inventories		15,768			17,561
Prepaid expenses		793			828
Advances to suppliers		6,006			6,027
Other current assets		823			1,104
Total current assets		45,824			48,512
LONG-TERM ASSETS:
Long-term receivables, net of allowance of $274 and $384 as of September 30, 2025 and December 31, 2024, respectively		9,152			8,534
Deferred tax assets		419			1,459
Severance pay funds		523			488
Property and equipment, net		866			936
Operating right-of-use assets, net		2,465			3,282
Intangible assets		2,375			4,973
Total long-term assets		15,800			19,672
TOTAL ASSETS	$	61,624		$	68,184
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables	$	7,108		$	6,484
Accrued expenses and other current liabilities		14,211			11,433
Note payable		25,072			8,271
Unearned interest income		864			907
Warranty accrual		795			917
Deferred revenues		1,351			953
Operating lease liabilities		1,249			1,322
Total current liabilities		50,650			30,287
LONG-TERM LIABILITIES:
Long-term debt		4,996			31,437
Accrued severance pay		554			528
Unearned interest income		383			364
Warranty accrual		170			222
Operating lease liabilities		1,349			1,997
Other long-term liabilities		388			511
Total long-term liabilities		7,840			35,059
TOTAL LIABILITIES		58,490			65,346
Commitments and Contingencies (Note 9)
STOCKHOLDERS’ EQUITY (Note 14):
Common Stock, $0.0001 par value: 300,000,000 shares authorized as of September 30, 2025 and December 31, 2024; 1,859,123 and 709,130 issued and outstanding as of September 30, 2025, and December 31, 2024, respectively		31			30
Additional paid-in capital		358,190			311,238
Accumulated deficit		(355,548	)		(308,899	)
TOTAL STOCKHOLDERS’ EQUITY		2,673			2,369
Non-controlling interests		461			469
		3,134			2,838
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	61,624		$	68,184

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

VENUS CONCEPT INC.

Condensed Consolidated Statements of Operations

(Unaudited)

_{(in thousands, except per share data);}

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2025*			*2024*			*2025*			*2024*
Revenue
Leases	$	2,935		$	2,684		$	10,265		$	10,732
Products and services		10,841			12,323			32,846			38,336
		13,776			15,007			43,111			49,068
Cost of goods sold:
Leases		906			651			3,019			2,538
Products and services		4,053			4,435			13,089			13,113
		4,959			5,086			16,108			15,651
Gross profit		8,817			9,921			27,003			33,417
Operating expenses:
Selling and marketing		7,386			6,654			22,063			21,076
General and administrative		9,647			8,732			28,815			27,640
Research and development		1,280			1,692			4,190			5,214
Total operating expenses		18,313			17,078			55,068			53,930
Loss from operations		(9,496	)		(7,157	)		(28,065	)		(20,513	)
Other expenses:
Foreign exchange (gain) loss		(35	)		57			(699	)		1,155
Finance expenses		1,016			1,665			3,753			5,785
Loss on disposal of subsidiaries		244			—			244			—
Loss on debt extinguishment		11,297			454			14,211			11,355
Loss before income taxes		(22,018	)		(9,333	)		(45,574	)		(38,808	)
Income tax (benefit) expense		531			(31	)		1,083			147
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)
Net loss attributable to stockholders of the Company	$	(22,565	)	$	(9,286	)	$	(46,649	)	$	(39,031	)
Net (loss) income attributable to non-controlling interest	$	16		$	(16	)	$	(8	)	$	76

Net loss per share:
Basic	$	(12.14	)	$	(13.10	)	$	(34.66	)	$	(60.61	)
Diluted	$	(12.14	)	$	(13.10	)	$	(34.66	)	$	(60.61	)
Weighted-average number of shares used in per share calculation:
Basic		1,859			709			1,346			644
Diluted		1,859			709			1,346			644

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VENUS CONCEPT INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

_{(in thousands)}

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2025*			*2024*			*2025*			*2024*
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)
Loss attributable to stockholders of the Company		(22,565	)		(9,286	)		(46,649	)		(39,031	)
Income (loss) attributable to non-controlling interest		16			(16	)		(8	)		76
Comprehensive loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VENUS CONCEPT INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

(in thousands, except share data)

			*Preferred Shares*						*Common Stock*
	2022 Private Placement Shares*		2023 Multi-Tranche Private Placement Shares*		2023 Series X Private Placement Shares*		2024-2025 Series Y Private Placement Shares*		*Shares*		*Amount*		*Additional Paid-in-Capital*		*Accumulated Deficit*			*Non-controlling Interest*			*Total Stockholders' Equity (Deficit)*
Balance — January 1, 2025		1,835,000		1,575,810		289,936		780,569		709,130	$	30	$	311,238	$	(308,899	)	$	469		$	2,838
Net loss — the Company		—		—		—		—		—		—		—		(12,363	)		—			(12,363	)
Net loss — non-controlling interest		—		—		—		—		—		—		—		—			(3	)		(3	)
Exchange of Convertible Notes for Series Y Private Placement shares		—		—		—		379,311		—		0*		12,049		—			—			12,049
2023 Series X Private Placement shares dividends		—		—		9,061		—		—		—		—		—			—			—
Stock-based compensation		—		—		—		—		—		—		207		—			—			207
Balance — March 31, 2025		1,835,000		1,575,810		298,997		1,159,880		709,130	$	30	$	323,494	$	(321,262	)	$	466		$	2,728
Net loss — the Company		—		—		—		—		—		—		—		(11,721	)		—			(11,721	)
Net loss — non-controlling interest		—		—		—		—		—		—		—		—			(21	)		(21	)
Exchange of Convertible Notes for Series Y Private Placement shares		—		—		—		325,651		—		0*		8,365		—			—			8,365
2023 Series X Private Placement shares dividends		—		—		9,344		—		—		—		—		—			—			—
2025 Registered Direct Offering shares and warrants, net of costs		—		—		—		—		1,149,993		1		3,283		—			—			3,284
Stock-based compensation		—		—		—		—		—		—		137		—			—			137
Balance — June 30, 2025		1,835,000		1,575,810		308,341		1,485,531		1,859,123	$	31	$	335,279	$	(332,983	)	$	445		$	2,772
Net loss — the Company		—		—		—		—		—		—		—		(22,565	)		—			(22,565	)
Net loss — non-controlling interest		—		—		—		—		—		—		—		—			16			16
Exchange of Convertible Notes for Series Y Private Placement shares		—		—		—		545,335		—		0*		22,776		—			—			22,776
2023 Series X Private Placement shares dividends		—		—		9,636		—		—		—		—		—			—			—
Stock-based compensation		—		—		—		—		—		—		135		—			—			135
Balance — September 30, 2025		1,835,000		1,575,810		317,977		2,030,866		1,859,123	$	31	$	358,190	$	(355,548	)	$	461		$	3,134

				*Preferred Shares*						*Common Stock*
	2022 Private Placement Shares*			2023 Multi-Tranche Private Placement Shares*		2023 Series X Private Placement Shares*		2024 Series Y Private Placement Shares*		*Shares*		*Amount*		*Additional Paid-in-Capital*		*Accumulated Deficit*			*Non-controlling Interest*			*Total Stockholders' Equity (Deficit)*
Balance — January 1, 2024		3,185,000			1,575,810		256,356		—		552,205	$	30	$	247,854	$	(261,903	)	$	570		$	(13,449	)
Issuance of common stock		—			—		—		—		758		0*		10		—			—			10
2024 Registered Direct Offering shares and warrants, net of costs		—			—		—		—		74,342		—		977		—			—			977
2023 Series X Private Placement shares dividends		—			—		8,012		—		—		—		—		—			—			-
Net loss - the Company		—			—		—		—		—		—		—		(9,794	)		—			(9,794	)
Net income - non-controlling interest		—			—		—		—		—		—		—		—			5			5
Stock-based compensation		—			—		—		—		—		—		339		—			—			339
Balance — March 31, 2024		3,185,000			1,575,810		264,368		—		627,305	$	30	$	249,180	$	(271,697	)	$	575		$	(21,912	)
Exchange of MSLP Loan for Series Y Private Placement shares		—			—		—		576,986		—		—		45,901		—			—			45,901
Conversion of 2022 Private Placement shares		(1,350,000	)		—		—		—		81,825		0*		—		—			—			-
2023 Series X Private Placement shares dividends		—			—		8,025		—		—		—		—		—			—			-
Net loss - the Company		—			—		—		—		—		—		—		(19,951	)		—			(19,951	)
Net income - non-controlling interest		—			—		—		—		—		—		—		—			87			87
Stock-based compensation		—			—		—		—		—		—		239		—			—			239
Balance — June 30, 2024		1,835,000			1,575,810		272,393		576,986		709,130	$	30	$	295,320	$	(291,648	)	$	662		$	4,364
Exchange of MSLP Loan for Series Y Private Placement shares		—			—		—		203,583		—		—		15,453		—			—			15,453
2023 Series X Private Placement shares dividends		—			—		8,757		—		—		—		—		—			—			-
Net loss - the Company		—			—		—		—		—		—		—		(9,286	)		—			(9,286	)
Net loss - non-controlling interest		—			—		—		—		—		—		—		—			(16	)		(16	)
Dividends from subsidiaries		—			—		—		—		—		—		—		—			(126	)		(126	)
Stock-based compensation		—			—		—		—		—		—		239		—			—			239
Balance — September 30, 2024		1,835,000			1,575,810		281,150		780,569		709,130	$	30	$	311,012	$	(300,934	)	$	520		$	10,628

*: Presented as $0 due to rounding.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VENUS CONCEPT INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

_{(in thousands)}

	*Nine Months Ended September 30,*
	*2025*			*2024*
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(46,657	)	$	(38,955	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,881			2,924
Stock-based compensation		479			817
Provision for expected credit losses		2,622			869
Provision for inventory obsolescence		1,031			950
Finance expenses and accretion		4,028			4,150
Deferred tax expense (recovery)		1,041			(275	)
Loss on disposal of subsidiaries		244			-
Loss on debt extinguishment		14,211			11,355
Loss on disposal of property and equipment		1			2
Changes in operating assets and liabilities:
Accounts receivable short-term and long-term		(1,014	)		9,914
Inventories		566			3,218
Prepaid expenses		35			296
Advances to suppliers		21			1,096
Other current assets		246			712
Operating right-of-use assets, net		817			926
Other long-term assets		(8	)		(281	)
Trade payables		684			(1,607	)
Accrued expenses and other current liabilities		3,054			(1,583	)
Current operating lease liabilities		(73	)		(183	)
Severance pay funds		(35	)		147
Unearned interest income		(24	)		(718	)
Long-term operating lease liabilities		(648	)		(829	)
Other long-term liabilities		(150	)		(204	)
Net cash used in operating activities		(16,648	)		(7,259	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(214	)		(43	)
Net cash used in investing activities		(214	)		(43	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		1			10
2024 Registered Direct Offering shares and warrants, net of costs of $222		—			976
2024 Convertible Notes issued to EW, net of costs of $393		—			1,607
2025 Registered Direct Offering shares and warrants, net of costs of $589		3,283			-
Proceeds from Short-term Bridge Financing by Madryn, net of costs of $91 (2024 - $310)		15,238			3,928
Dividends from subsidiaries paid to non-controlling interest		-			(126	)
Net cash provided by financing activities		18,522			6,395
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		1,660			(907	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period		4,271			5,396
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period	$	5,931		$	4,489
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes, net of refunds received	$	(23	)	$	98
Cash paid for interest	$	—		$	1,633

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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VENUS CONCEPT INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

(in thousands, unless otherwise noted, except share and per share data)

1. NATURE OF OPERATIONS

Venus Concept Inc. is a global medical technology company that develops, commercializes, and sells minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related services. The Company's systems have been designed on cost-effective, proprietary and flexible platforms that enable it to expand beyond the aesthetic industry’s traditional markets of dermatology and plastic surgery, and into non-traditional markets, including family and general practitioners and aesthetic medical spas. The Company was incorporated in the state of Delaware on November 22, 2002. In these notes to the condensed consolidated financial statements, the “Company,” “Venus Concept,” “our,” and “we,” refer to Venus Concept Inc. and its subsidiaries on a consolidated basis.

Review of Strategic Alternatives

On January 24, 2024, the Company announced that the Board of Directors of the Company (the “Board”) is evaluating potential strategic alternatives to maximize shareholder value. As part of the process, the Board is considering a full range of strategic alternatives, which may include one or more financings, mergers, reverse mergers, other business combinations, sales of assets, licensings or other transactions.

There can be no assurance that the evaluation of strategic alternatives will result in any transaction, nor can there be any assurance regarding any transaction’s timing or ultimate outcome. The Company has not set a timetable for completion of the process and does not intend to disclose developments related to the process unless and until the Company executes a definitive agreement with respect thereto, or the Board otherwise determines that further disclosure is appropriate or required.

Unit Purchase Agreement

On June 5, 2025, the Company entered into a Unit Purchase Agreement (the "Purchase Agreement") by and among the Company, Meta Robotics LLC (“Meta”) and MHG Co., Ltd. (“Meta Healthcare Group”) pursuant to which the Company agreed to sell the Venus Hair Business (as defined below) to Meta Healthcare Group in an all-cash transaction valued at $20 million, subject to a customary working capital adjustment (the “Transaction”).

Under the terms of the Purchase Agreement, Meta Healthcare Group will acquire Meta, a newly formed subsidiary of the Company, containing the Company’s portfolio of hair restoration and hair transplant technologies, related equipment, services and assets, including intellectual property relating to the ARTAS and NeoGraft technologies (the “Venus Hair Business”). Additionally, Meta Healthcare Group will assume the Company’s manufacturing and research and development facility in San Jose, California, as well as the rights to manufacture NeoGraft. Meta Healthcare Group will grant a perpetual, royalty-free, worldwide license to the Company with respect to a subset of transferred patents pursuant to a license agreement to be entered into between the parties (the “License Agreement”).

The Purchase Agreement contains customary representations, warranties and covenants for a transaction of this type. The Company has also agreed not to solicit proposals relating to alternative business combination transactions with respect to the Venus Hair Business, subject to certain exceptions that permit the Company’s Board of Directors to comply with its fiduciary duties.

Closing of the Transaction is subject to the satisfaction or waiver of certain closing conditions, including, without limitation: an internal reorganization of the Venus Hair Business within Meta; governmental and regulatory approvals; required consents, including those of certain customers, suppliers and those required pursuant to the Republic of Korea foreign exchange regulation; a financial statement review; and the execution of a License Agreement. On November 7, 2025, the Company filed a complaint with the Delaware Court of Chancery, seeking its assistance to close the Transaction.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future, and, as such, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

The Company has had recurring net operating losses and negative cash flows from operations. As of September 30, 2025 and December 31, 2024, the Company had an accumulated deficit of $355,548 and $308,899, respectively, though, the Company was in compliance with all required covenants as of September 30, 2025, and December 31, 2024. The Company’s recurring losses from operations and negative cash flows raise substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date that the condensed consolidated financial statements are issued. The global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including increasing inflation rates, rising interest rates, foreign currency impacts, trade disruptions due to tariff rate increases or proposed increases, declines in consumer confidence, and declines in economic growth. All these factors point to uncertainty about economic stability, and the severity and duration of these conditions on our business cannot be predicted, and the Company cannot assure that it will remain in compliance with the financial covenants contained within its credit facilities.

In order to continue its operations, the Company must achieve profitable operations and/or obtain additional equity or debt financing. Until the Company achieves profitability, management plans to fund its operations and capital expenditures with cash on hand, borrowings, and issuance of capital stock. Until the Company generates revenue at a level to support its cost structure, the Company expects to continue to incur substantial operating losses and net cash outflows from operating activities.

Given the economic uncertainty in U.S. and international markets, the Company cannot anticipate the extent to which the current financial market conditions and trade disruptions will continue to adversely impact the Company’s business and the Company may need additional capital to fund its future operations and to access the capital markets sooner than planned. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, it may be compelled to reduce the scope of its operations and planned capital expenditures or sell certain assets, including intellectual property assets. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from the uncertainty. Such adjustments could be material.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2025. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for fair presentation have been included. Operating results for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in Item 8 of the Company’s most recent Annual Report on Form 10-K.

The preparation of these condensed consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company as of September 30, 2025 and through the date of this report filing. The accounting matters assessed included, but were not limited to, the allowance for expected credit losses and the carrying value of intangible and long-lived assets.

Amounts reported in thousands within this report are computed based on the amounts in U.S. dollars. As a result, the sum of the components reported in thousands may not equal the total amount reported in thousands due to rounding. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented are calculated from the underlying numbers in dollars.

Accounting Policies

The accounting policies the Company follows are set forth in the Company’s audited consolidated financial statements for fiscal year 2024. For further information, refer to the consolidated financial statements and footnotes thereto included in Item 8 of the Company’s most recent Annual Report on Form 10-K. There have been no material changes to these accounting policies.

In the second quarter of fiscal year 2025, the Company adopted a new accounting policy related to Restricted Cash. This policy was disclosed in detail in our Quarterly Report on Form 10-Q for the period ended June 30, 2025. The accounting policy continues to be applied in the current quarter.

Recently Adopted Accounting Standards

In December 2023, the FASB issued ASU No. 2023-09 ("ASU 2023-09") Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. This pronouncement is effective for fiscal years beginning after December 15, 2024 and early adoption is permitted. On January 1, 2025, the adoption of ASU 2023-09 did not have a material impact on the Company’s condensed consolidated financial statements or disclosures. The Company will apply this guidance in its annual financial statements for the fiscal year ended December 31, 2025.

Recently Issued Accounting Standards Not Yet Adopted

In October 2023, the FASB issued ASU No. 2023-06 ("ASU 2023-06") Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU was issued to clarify or improve disclosure and presentation requirements of a variety of topics, which will allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the FASB accounting standard codification with the SEC's regulations. The ASU will become effective prospectively on the earlier of the date on which the SEC removes its disclosure requirements for the related disclosure or June 30, 2027. The Company is currently evaluating the provisions of the amendments and the impact on its future consolidated statements.

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3. NET LOSS PER SHARE

Net Loss Per Share

Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, common stock warrants and stock options are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data):

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2025*			*2024*			*2025*			*2024*
Numerator:
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)
Net loss allocated to stockholders of the Company	$	(22,565	)	$	(9,286	)	$	(46,649	)	$	(39,031	)
Denominator:
Weighted-average shares of common stock outstanding used in computing net loss per share, basic		1,859			709			1,346			644
Weighted-average shares of common stock outstanding used in computing net loss per share, diluted		1,859			709			1,346			644
Net loss per share:
Basic	$	(12.14	)	$	(13.10	)	$	(34.66	)	$	(60.61	)
Diluted	$	(12.14	)	$	(13.10	)	$	(34.66	)	$	(60.61	)

Due to the net loss, all the outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the quarters ended September 30, 2025 and 2024 because including them would have been antidilutive:

	*September 30, 2025*		*September 30, 2024*
Options to purchase common stock		72,687		90,479
Preferred stock		19,244,658		7,844,853
Shares reserved for convertible notes		183,383		259,368
Warrants for common stock		1,062,584		176,144
Total potential dilutive shares		20,563,312		8,370,844

4. FAIR VALUE MEASUREMENTS

Financial assets and financial liabilities are initially recognized at fair value when the Company becomes a party to the contractual provisions of the financial instrument. Subsequently, all financial instruments are measured at amortized cost using the effective interest method.

The financial instruments of the Company consist of cash, cash equivalents, restricted cash, accounts receivable, long-term receivables, lines of credit, trade payables, accrued expenses and other current liabilities, note payable, other long-term liabilities and long-term debt. In view of their nature, the fair value of these financial instruments approximates their carrying amounts.

The Company measures the fair value of its financial assets and financial liabilities using the fair value hierarchy. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Guaranteed investment certificates are classified within Level 2 as the Company uses alternative pricing sources and models utilizing market observable inputs for valuation.

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The Company's convertible note (see Note 12) contains an embedded derivative feature that was required to be bifurcated and remeasured to fair value at each reporting period based on significant inputs not observable in the market, and is classified as a Level 3 measurement according to the fair value hierarchy described above. The changes in fair value recognized as a component of finance expenses. The fair value of derivative liability was determined using a probability-weighted expected return method (“PWERM”) using the “With and Without” approach (a form of an income approach). Under this approach various scenarios were considered to trigger the change of control, conversion, and redemption scenarios constituting the embedded derivative. The PWERM analysis contains inherent assumptions related to expected stock price volatility, conversion and redemption timing, and risk-free interest rate. Due to the use of significant unobservable inputs, the overall fair value measurement of the derivative liability is classified as Level 3.

The following tables set forth the fair value of the Company’s Level 1, Level 2 and Level 3 financial assets and liabilities within the fair value hierarchy, and there were no transfers between Level 1, Level 2 and Level 3 for the periods presented:

	*Fair Value Measurements as of September 30, 2025*
	*Quoted Prices in Active Markets using Identical Assets (Level 1)*		*Significant Other Observable Inputs (Level 2)*		*Significant Unobservable Inputs (Level 3)*		*Total*
Assets
Guaranteed Investment Certificates	$	—	$	29	$	—	$	29
Total assets	$	—	$	29	$	—	$	29
Liabilities
Derivative Liability	$	—	$	—	$	96		96
Total liabilities	$	—	$	—	$	96	$	96

	*Fair Value Measurements as of December 31, 2024*
	*Quoted Prices in Active Markets using Identical Assets (Level 1)*		*Significant Other Observable Inputs (Level 2)*		*Significant Unobservable Inputs (Level 3)*		*Total*
Assets
Guaranteed Investment Certificates	$	—	$	28	$	—	$	28
Total assets	$	—	$	28	$	—	$	28
Liabilities
Derivative Liability	$	—	$	—	$	175	$	175
Total liabilities	$	—	$	—	$	175	$	175

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5. ACCOUNTS RECEIVABLE

The Company’s products may be sold under our Venus Prime program and legacy subscription model, with unencumbered title passing to the customer at the end of the lease term, which is generally 36 months. These arrangements are considered to be sales-type leases, where the present value of all cash flows to be received under the agreement is recognized upon shipment to the customer as lease revenue. Venus Prime, launched in January 2024, is a structured in-house financing program which replaces the legacy subscription program for new customers in North America.

A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company's condensed consolidated balance sheets. The Company's financing receivables, consisting of sales-type leases, totaled $18,320 and $19,262 as of September 30, 2025 and December 31, 2024, respectively, and are included in accounts receivable and long-term receivables on the condensed consolidated balance sheets. The Company evaluates the credit quality of an obligor at lease inception and monitors credit quality over the term of the underlying transactions.

The Company performed an assessment of the allowance for expected credit losses as of September 30, 2025 and December 31, 2024. Based upon such assessment, the Company recorded an allowance for expected credit losses totaling $2,052 and $3,786 as of September 30, 2025, and December 31, 2024, respectively.

A summary of the Company’s accounts receivables is presented below:

	*September 30,*			*December 31,*
	*2025*			*2024*
Gross accounts receivable	$	27,707		$	31,041
Unearned income		(1,247	)		(1,271	)
Allowance for expected credit losses		(2,052	)		(3,786	)
	$	24,408		$	25,984
Reported as:
Current trade receivables	$	16,503		$	18,721
Current unearned interest income		(864	)		(907	)
Long-term trade receivables		9,152			8,534
Long-term unearned interest income		(383	)		(364	)
	$	24,408		$	25,984

Current Venus Prime and subscription agreements are reported as part of accounts receivable. The following are the contractual commitments, net of allowance for expected credit losses, to be received by the Company over the next 5 years:

			September 30,
	Total		2025		2026		2027		2028		2029
Current financing receivables, net of allowance of $676	$	9,168	$	9,168	$	—	$	—	$	—	$	—
Long-term financing receivables, net of allowance of $274		9,152		—		5,958		3,125		69		—
	$	18,320	$	9,168	$	5,958	$	3,125	$	69	$	—

Accounts receivable from our Venus Prime program bear interest commensurate with the customer's credit risk. Accounts receivable from our legacy subscription model do not bear interest and are typically not collateralized. The Company performs credit evaluations on new and existing customers' financial condition and maintains an allowance for expected credit losses. Uncollectible accounts are charged to expense when deemed uncollectible, and accounts receivable are presented net of an allowance for expected credit losses. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. Actual losses may differ from the Company’s estimates and could be material to its condensed consolidated balance sheets, results of operations and cash flows.

The allowance for expected credit losses consisted of the following activity:

Balance at January 1, 2024	$	7,415
Write-offs		(5,055	)
Provision		1,426
Balance at December 31, 2024	$	3,786
Write-offs		(1,906	)
Provision		1,172
Balance at March 31, 2025	$	3,052
Write-offs		(1,119	)
Provision		1,157
Balance at June 30, 2025	$	3,090
Write-offs		(1,331	)
Provision		293
Balance at September 30, 2025	$	2,052

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6. SELECT BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

Inventory

Inventory consists of the following:

	*September 30,*		*December 31,*
	*2025*		*2024*
Raw materials	$	1,435	$	1,649
Work-in-progress		1,227		1,658
Finished goods		13,106		14,254
Total inventory	$	15,768	$	17,561

Additions to inventory are primarily comprised of newly produced units and applicators, refurbishment cost from demonstration units and used equipment which were reacquired during the period from upgraded sales. The Company expensed $3,942 and $13,631 in cost of goods sold in the three and nine months ended September 30, 2025, respectively. The Company expensed $4,637 and $13,839 in cost of goods sold in the three and nine months ended September 30, 2024, respectively. The balance of cost of goods sold represents the sale of applicators, parts, consumables and warranties.

The Company provides for excess and obsolete inventories when conditions indicate that the inventory cost is not recoverable due to physical deterioration, usage, obsolescence, reductions in estimated future demand and reductions in selling prices. Inventory provisions are measured as the difference between the cost of inventory and net realizable value to establish a lower cost basis for the inventories. As of September 30, 2025 and December 31, 2024, a provision for obsolescence of $2,630 and $1,977 was taken against inventory, respectively.

Property and Equipment, Net

Property and equipment, net consist of the following:

	Useful Lives		September 30,			December 31,
	(in years)		2025			2024
Lab equipment tooling and molds		4 –10	$	4,549		$	4,549
Office furniture and equipment		6 –10		1,180			1,160
Leasehold improvements	up to 10			768			752
Computers and software		3		1,010			863
Vehicles		5 –7		57			57
Demo units		5		300			214
Total property and equipment				7,864			7,595
Less: Accumulated depreciation				(6,998	)		(6,659	)
Total property and equipment, net			$	866		$	936

Depreciation expense amounted to $101 and $98 for the three months ended September 30, 2025 and 2024, respectively. Depreciation expense was $283 and $323 for the nine months ended September 30, 2025 and 2024, respectively.

Other Current Assets

	*September 30,*		*December 31,*
	*2025*		*2024*
Government remittances (1)	$	365	$	560
Consideration receivable from subsidiaries sale		23		49
Sundry assets and miscellaneous		435		495
Total other current assets	$	823	$	1,104

⁽¹⁾Government remittances are receivables from the local tax authorities for refunds of sales taxes and income taxes.

Accrued Expenses and Other Current Liabilities

	*September 30,*		*December 31,*
	*2025*		*2024*
Payroll and related expense	$	5,071	$	3,336
Accrued expenses		4,617		3,552
Commission accrual		1,898		2,096
Sales and consumption taxes		2,625		2,449
Total accrued expenses and other current liabilities	$	14,211	$	11,433

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Warranty Accrual

The following table provides the details of the change in the Company’s warranty accrual:

	*September 30,*			*December 31,*
	*2025*			*2024*
Balance as of the beginning of the period	$	1,139		$	1,363
Warranties issued during the period		96			727
Warranty costs incurred during the period		(270	)		(951	)
Balance at the end of the period	$	965		$	1,139
Current		795			917
Long-term		170			222
Total	$	965		$	1,139

Finance Expenses

The following table provides the details of the Company’s finance expenses:

	*Three Months Ended September 30,*					*Nine Months Ended September 30,*
	*2025*			*2024*		*2025*			*2024*
Interest expense	$	1,146		$	1,487	$	3,576		$	5,394
Change in fair value of derivative liability		(216	)		—		(79	)		(618	)
Accretion on long-term debt and amortization of fees		86			178		256			1,009
Total finance expenses	$	1,016		$	1,665	$	3,753		$	5,785

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7. LEASES

The following presents the various components of lease costs.

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Operating lease cost	$	329	$	355	$	1,001	$	1,110
Total lease cost	$	329	$	355	$	1,001	$	1,110

The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the amounts below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Operating cash outflows from operating leases	$	329	$	355	$	1,001	$	1,110

The following table presents the weighted-average lease term and discount rate for operating leases.

	At September 30,
	2025			2024
Operating leases
Weighted-average remaining lease term	1.87 yrs.			1.69 yrs.
Weighted-average discount rate		4.00	%		4.00	%

The following table presents a maturity analysis of expected undiscounted cash flows for operating leases on an annual basis for the next five years and thereafter.

Years ending December 31,	*Operating leases*
2025	$	318
2026		1,189
2027		632
2028		201
2029		198
Thereafter		132
Imputed Interest (1)		(72	)
Total	$	2,598

⁽¹⁾ Imputed interest represents the difference between undiscounted cash flows and cash flows.

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8. INTANGIBLE ASSETS

Intangible assets net of accumulated amortization were as follows:

	*At September 30, 2025*
	*Gross Amount*		*Accumulated Amortization*			*Net Amount*
Customer relationships	$	1,400	$	(685	)	$	715
Brand		2,500		(1,790	)		710
Technology		16,900		(16,659	)		241
Supplier agreement		3,000		(2,291	)		709
Total intangible assets	$	23,800	$	(21,425	)	$	2,375

	*At December 31, 2024*
	*Gross Amount*		*Accumulated Amortization*			*Net Amount*
Customer relationships	$	1,400	$	(616	)	$	784
Brand		2,500		(1,593	)		907
Technology		16,900		(14,553	)		2,347
Supplier agreement		3,000		(2,065	)		935
Total intangible assets	$	23,800	$	(18,827	)	$	4,973

For the three months ended September 30, 2025 and 2024, amortization expense was $875 and $873, respectively. For the nine months ended September 30, 2025 and 2024, amortization expense was $2,598 and $2,600 respectively.

Estimated remaining amortization expense for the next five fiscal years and all years thereafter are as follows:

Years ending December 31,
2025	$	406
2026		657
2027		657
2028		244
2029		93
Thereafter		318
Total	$	2,375

9. COMMITMENTS AND CONTINGENCIES

Commitments

As of September 30, 2025, the Company has non-cancellable purchase orders placed with its contract manufacturers in the amount of $12.1 million. In addition, as of September 30, 2025, the Company had no open purchase orders that can be cancelled with 270 days’ notice.

Aggregate future service and purchase commitments with manufacturers as of September 30, 2025 are as follows:

Years ending December 31,	*Purchase and Service Commitments*
2025	$	12,116
2026 and Thereafter		—
Total	$	12,116

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10. MAIN STREET TERM LOAN

On December 8, 2020, the Company executed a loan and security agreement (the "MSLP Loan Agreement"), a promissory note (the "MSLP Note"), and related documents for a loan in the aggregate amount of $50,000 for which City National Bank of Florida (“CNB”) will serve as a lender pursuant to the Main Street Priority Loan Facility as established by the Board of Governors of the Federal Reserve System Section 13(3) of the Federal Reserve Act (the “MSLP Loan”). On December 9, 2020, the MSLP Loan had been funded and the transaction was closed. The MSLP Note has a term of five years and bears interest at a rate per annum equal to 30-day LIBOR plus 3%. On December 8, 2023 and December 8, 2024, the Company must make an annual payment of principal plus accrued but unpaid interest in an amount equal to fifteen percent (15%) of the outstanding principal balance of the MSLP Note (inclusive of accrued but unpaid interest). The entire outstanding principal balance of the MSLP Note at maturity, together with all accrued and unpaid interest was due and payable in full on December 8, 2025. The Company may prepay the MSLP Loan at any time without incurring any prepayment penalties. The MSLP Note provides for customary events of default, including, among others, those relating to a failure to make payment, bankruptcy, breaches of representations and covenants, and the occurrence of certain events. In addition, the MSLP Loan Agreement and MSLP Note contain various covenants that limit the Company’s ability to engage in specified types of transactions. Subject to limited exceptions, these covenants limit the Company’s ability, without CNB’s consent, to, among other things, sell, lease, transfer, exclusively license or dispose of the Company’s assets, incur, create, or permit to exist additional indebtedness, or liens, to make dividends and other restricted payments, and to make certain changes to its ownership structure.

On October 4, 2023, the Company, Venus Concept USA Inc. (“Venus USA”), Venus Concept Canada Corp. (“Venus Canada”) and Venus Concept Ltd. (“Venus Ltd.” and, together with Venus USA, Venus Canada and the Company, the "Loan Parties") entered into the Loan Modification Agreement with CNB, which modified certain terms of the MSLP Loan Agreement. The primary modifications of the MSLP Loan Modification were (i) the principal payment in the amount of 15% of the outstanding principal balance of the loan originally due December 31, 2023 is deferred until maturity, (ii) the principal payment in the amount of 15% of the outstanding principal balance of the loan originally due December 31, 2024 is reduced to 7.5% with the remainder deferred until maturity, (iii) the interest rate of the loan is reset from one-month LIBOR plus three percent (3%) to one-month term Secured Overnight Financing Rate (SOFR) plus three and one-quarter percent (3.25%), and (iv) Venus USA has assigned certain of its subscription sales contracts to CNB.

On January 18, 2024, the Company and the Guarantors entered into a Loan Modification Agreement (the “Loan Modification Agreement”) with CNB and Madryn Health Partners, LP, and certain of its affiliates (collectively, “Madryn”). The Loan Modification Agreement amends the MSLP Loan Agreement to, among other things, satisfy the 2023 Minimum Deposit Requirements (as defined in the Loan Modification Agreement) and defer the testing of the Minimum Deposit Relationship obligations set forth in the MSLP Loan Agreement for the monthly periods ending on January 31, 2024, February 28, 2024 and March 31, 2024 until April 30, 2024.

On April 23, 2024, the MSLP Loan was purchased by Madryn for an undisclosed amount from CNB with the consent of the Company. On May 24, 2024, the MSLP Loan was amended by way of a loan amendment and consent agreement (the “MSLP Loan Amendment”) with Madryn. The MSLP Loan Amendment amended the Loan Agreement to, among other things, (i) modify the May 2024 and June 2024 interest payments to be payable-in-kind, (ii) grant certain relief from the Minimum Deposit Relationship obligations through June 7, 2024.

On May 24, 2024, the Company entered into an Exchange Agreement, by and among the Company, Venus USA, and Madryn (the "2024 Exchange Agreement") whereby the Company exchanged $52,142 in aggregate principal amount outstanding under the MSLP Loan Agreement for $17,142 in aggregate principal of new secured notes (“New Secured Notes”) and 576,986 shares of newly-created convertible preferred stock of the Company, designated as Series Y Convertible Preferred Stock (the "Series Y Preferred Stock"). The Series Y Preferred Stock is priced at $60.66 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding date of the 2024 Exchange Agreement, multiplied by (ii) 100. The New Secured Notes follow the same terms as the MSLP Loan Agreement. As part of the extinguishment of principal, the Company recognized a $10.9 million non-cash loss.

On June 7, 2024, the Loan Parties entered into a consent agreement with Madryn to amend the MSLP Loan Amendment to, among other things, grant certain relief from minimum liquidity requirements under the MSLP Loan Amendment. On June 21, 2024, the Loan Parties entered into an Amendment and Consent Agreement with the Lenders to, among other things, (i) modify the July 2024 interest payment to be payable-in-kind, (ii) grant relief from the Minimum Deposit Relationship obligations through July 8, 2024.

On July 8, 2024, the Loan Parties entered into a loan amendment and consent agreement with the Lenders to, among other things, grant relief under the MSLP Loan Agreement, as amended, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through August 2, 2024, and (ii) certain operating covenants for the June 30, 2024 measurement period were deleted.

On July 29, 2024, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through August 30, 2024, and (ii) permit Venus USA to apply the August 8, 2024 cash interest payment due to the respective outstanding principal balance of each Note.

On August 30, 2024, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through September 30, 2024, and (ii) permit Venus USA to apply the September 8, 2024 cash interest payment due to the respective outstanding principal balance of each Note.

Additionally, on September 26, 2024, the Company entered into the Second 2024 Exchange Agreement whereby the Company exchanged $17,662 of the balance outstanding under the MSLP Loan Agreement for $2,662 in aggregate principal amount outstanding under the MSLP Loan Agreement and 203,583 shares of Series Y Preferred Stock. As part of the extinguishment of principal, the Company recognized a $0.5 million non-cash loss. Also, on September 26, 2024 the Loan Parties entered into a Third Loan Amendment which, among other things, (i) modify the October 2024 interest payment to be payable-in-kind, (ii) delete the net loss covenant, and (iii) grant relief from minimum liquidity requirements.

On October 31, 2024, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through November 30, 2024, and (ii) permit Venus USA to apply the November 8, 2024 cash interest payment due to the respective outstanding principal balance of each Note.

On November 26, 2024, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through December 31, 2024, (ii) permit Venus USA to apply the December 8, 2024 cash interest payment due to the respective outstanding principal balance of each Note, and (iii) defer the previously scheduled December 2024 principal payment to maturity.

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On December 31, 2024, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through January 31, 2025, and (ii) permit Venus USA to apply the January 8, 2025 cash interest payment due to the respective outstanding principal balance of each Note.

On January 28, 2025, the Loan Parties entered into a consent agreement with the Lenders which granted relief under 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 to the respective outstanding principal balance of each Note.

On February 28, 2025, the Loan Parties entered into an Amendment and Consent Agreement with the Lenders (the “Amendment and Consent Agreement”), to extend the maturity date of the MSLP Loan Agreement from December 8, 2025 to December 8, 2026.

The Amendment and Consent Agreement also granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through March 31, 2025, and (ii) permit Venus USA to apply the March 8, 2025 cash interest payment due under each Note (as defined in the Amendment and Consent Agreement) to the respective outstanding principal balance of each Note.

On March 27, 2025, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through April 30, 2025, and (ii) permit Venus USA to apply the April 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

On April 30, 2025, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through May 31, 2025, and (ii) permit Venus USA to apply the May 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

On May 30, 2025, the Loan Parties entered into a consent agreement with the Lenders which granted relief under the MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through June 30, 2025, and (ii) Venus USA is permitted to apply the June 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

On June 30, 2025, the Loan Parties entered into a consent agreement with the Lenders MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through July 31, 2025, and (ii) Venus USA is permitted to apply the July 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

On July 31, 2025, the Loan Parties entered into a consent agreement with the Lenders MSLP Loan Agreement, such that certain minimum liquidity requirements under the MSLP Loan Agreement are waived through August 6, 2025.

On August 6, 2025, the Loan Parties entered into a consent agreement with the Lenders MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through August 31, 2025, and (ii) Venus USA is permitted to apply the August 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

On August 31, 2025, the Loan Parties entered into a consent agreement with the Lenders MSLP Loan Agreement, such that certain minimum liquidity requirements under the MSLP Loan Agreement are waived through September 30, 2025.

On September 30, 2025, the Loan Parties entered into a consent agreement with the Lenders MSLP Loan Agreement, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through October 31, 2025, and (ii) Venus USA is permitted to apply the October 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

As of September 30, 2025 and December 31, 2024, the Company was in compliance with all required covenants.

The scheduled payments, inclusive of principal and estimated interest, on the outstanding borrowings as of September 30, 2025 are as follows:

		*As of September 30, 2025*
2025	$	18
2026		3,120
Total	$	3,138

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11. MADRYN DEBT AND CONVERTIBLE NOTES

Convertible Notes

On October 11, 2016, Venus Ltd. entered into a credit agreement as a guarantor with Madryn, as amended (the “Madryn Credit Agreement”), pursuant to which Madryn agreed to make certain loans to certain of Venus Concept’s subsidiaries.

On December 9, 2020, contemporaneously with the MSLP Loan Agreement (Note 10), the Company and its subsidiaries, Venus USA, Venus Ltd., Venus Canada, and the Madryn Noteholders (as defined below), entered into a securities exchange agreement (the "Exchange Agreement") dated as of December 8, 2020, pursuant to which the Company on December 9, 2020 (i) repaid $42.5 million aggregate principal amount owed under the Madryn Credit Agreement, and (ii) issued to Madryn Health Partners (Cayman Master), LP and Madryn Health Partners, LP (together, the "Madryn Noteholders") secured subordinated convertible notes in the aggregate principal amount of $26.7 million (the "Notes"). The Madryn Credit Agreement was terminated effective December 9, 2020 upon the funding and closing of the MSLP Loan and the issuance of the Notes.

On October 4, 2023, the Company entered into a securities exchange agreement (the "2023 Exchange Agreement") with the Madryn Noteholders. Pursuant to the 2023 Exchange Agreement, the Madryn Noteholders agreed to exchange (the "Exchange") $26.695 million in aggregate principal amount of outstanding secured convertible notes of the Company for (i) secured subordinated convertible notes in aggregate principal amount of $22.792 million (the “New Convertible Notes”) and (ii) 248,755 shares of newly-created convertible preferred stock of the Company, par value $0.0001 per share designated as "Series X Convertible Preferred Stock" (the "Series X Preferred Stock"). The Series X Preferred Stock is priced at $20.10 per share, being equal to the "Minimum Price" as set forth in Nasdaq Listing Rule 5635(d), multiplied by ten. The New Convertible Notes accrue interest at a rate of 3-month adjusted term Secured Overnight Financing Rate (SOFR) plus 8.50% per annum. In the case of an event of default under the New Convertible Notes, the then-applicable interest rate will increase by four percent (4.00%) per annum. Interest is payable in kind in arrears on the last business day of each calendar quarter of each year after the original issuance date, beginning on December 31, 2023. The New Convertible Notes mature on December 9, 2025, unless earlier redeemed or converted. As part of the extinguishment of principal, the Company recognized a $2.0 million loss.

On May 24, 2024, as required by the 2024 Exchange Agreement (Note 10), the New Convertible Notes were amended to, among other things, align the covenant protections in favor of the Madryn Noteholders with the MSLP Loan Agreement, as amended by the MSLP Loan Amendment.

On February 28, 2025, the Loan Parties and Holders entered into an amendment to secured subordinated convertible notes agreement which amended the New Notes to extend the maturity date of the New Notes from December 9, 2025 to December 9, 2026.

On March 31, 2025, the Company entered into an Exchange Agreement (the "2025 Exchange Agreement"), by and among the Company and the Madryn Noteholders whereby the Company exchanged $28,016 in aggregate principal amount outstanding under the New Secured Notes and 379,311 shares of Series Y Preferred Stock. The Series Y Preferred Stock is priced at $29.00 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding date of the 2025 Exchange Agreement, multiplied by (ii) 9.0909. The New Secured Notes follow the same terms as the existing New Notes. As part of the extinguishment of principal, the Company recognized a $1,049 non-cash loss.

On April 30, 2025, the Loan Parties entered into a consent agreement with and Lenders which granted relief under those certain secured subordinated convertible notes issued by the Company in favor of the Lenders, dated March 31, 2025 (the “2025 Notes”), such that certain minimum liquidity requirements under 2025 Notes are waived through May 31, 2025.

On May 30, 2025, the Loan Parties entered into a consent agreement with and Lenders which granted relief under the 2025 Notes, such that certain minimum liquidity requirements under the 2025 Notes are waived through June 30, 2025.

On June 30, 2025, the Company entered into an Exchange Agreement (the “June 2025 Exchange Agreement”) with the Madryn Noteholders. Pursuant to the June 2025 Exchange Agreement, the Madryn Noteholders agreed to exchange $17,016 in aggregate principal amount of outstanding secured convertible notes of the Company for: (a) a new promissory note to be issued by the Company to Madryn, in the original principal amount of $11,096 (the “New Madryn Note”), and (b) 325,651 shares of the Company’s convertible preferred stock, par value $0.0001 per share, designated as Series Y Preferred Stock. The Series Y Preferred Stock is priced at $19.96 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding the date of the June 2025 Exchange Agreement, multiplied by (ii) 9.0909. The New Secured Notes follow the same terms as the existing New Notes. As part of the extinguishment of principal, the Company recognized a $1,865 non-cash loss.

On September 30, 2025, the Company entered into an Exchange Agreement (the “September 2025 Exchange Agreement”) with Madryn Noteholders. Pursuant to the September 2025 Exchange Agreement, the Madryn Noteholders agreed to exchange $11,479 in aggregate principal and accrued interest amount of outstanding secured convertible notes of the Company for 545,335 shares of the Company’s convertible preferred stock, par value $0.0001 per share, designated as Series Y Preferred Stock. The Series Y Preferred Stock is priced at $21.05 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding the date of the September 2025 Exchange Agreement, multiplied by (ii) 9.0909. Following the September 2025 Exchange Agreement there was no principal or interest remaining on the New Secured Notes. As part of the debt extinguishment, the Company recognized an $11,297 non-cash loss.

In connection with the New Convertible Notes and Notes, the Company recognized interest expense of $383 and $903 during the three months ended September 30, 2025 and 2024, respectively and recognized interest expense of $1,878 and $2,598 during the nine months ended September 30, 2025 and 2024, respectively. The New Convertible Notes previously contained embedded redemption features that were accounted for under ASC 815, Derivatives and Hedging. As of September 30, 2025, no such instruments remain outstanding. For the three and nine months ended September 30, 2025, the Company did not make any principal repayments, only exchanges.

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Bridge Financing

On April 23, 2024, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”), by and among Venus USA, (the “Bridge Borrower”), Venus Canada, Venus Ltd. (Venus Ltd., together with the Company and Venus Canada, the “2024 Guarantors,” and together with the Bridge Borrower, the “Bridge Financing Loan Parties”) and, each lender party thereto (collectively, the “2024 Lenders”) and Madryn Health Partners, LP, as administrative agent. Pursuant to the Loan and Security Agreement, the 2024 Lenders agreed to provide the Bridge Borrower with bridge financing in the form of a term loan in the original principal amount of $2,238 and one or more delayed draw term loans of up to an additional principal amount of $2,762 (the “Bridge Financing”). The Bridge Financing originally had a maturity date of May 26, 2024. Pursuant to the Loan and Security Agreement, each of the 2024 Guarantors, jointly and severally, guarantee, that the Obligations (as defined in the Loan and Security Agreement) will be performed and paid in full when due and payable.

Borrowings under the Loan and Security Agreement will bear interest at a rate per annum equal to 12%, due at maturity. The Loan and Security Agreement also provides that all present and future indebtedness and the obligations of the Bridge Borrower to Madryn Health Partners, LP shall be secured by a priority security interest in all real and personal property collateral of the Bridge Financing Loan Parties.

The Loan and Security Agreement contains customary representations, warranties and affirmative and negative covenants. In addition, the Loan and Security Agreement contains customary events of default that entitle Madryn Health Partners, LP to cause the Bridge Borrower’s indebtedness under the Loan and Security Agreement to become immediately due and payable, and to exercise remedies against the Bridge Financing Loan Parties and the collateral securing the Bridge Financing. Under the Loan and Security Agreement, an event of default will occur if, among other things, any of the Bridge Financing Loan Parties fails to make payments under the Loan and Security Agreement, any of the Bridge Financing Loan Parties breaches any of the covenants under the Loan and Security Agreement, a Change of Control (as defined in the Loan and Security Agreement) occurs, any of the Bridge Financing Loan Parties, or its assets, become subject to certain legal proceedings, such as bankruptcy proceedings. Upon the occurrence and for the duration of an event of default, a default interest rate equal to 15.0% per annum will apply to all obligations owed under the Loan and Security Agreement.

On May 24, 2024, the Loan and Security Agreement was amended to extend the maturity date from May 26, 2024 to June 7, 2024. On June 7, 2024, the Loan Parties entered into a Second Bridge Loan Amendment Agreement which further extended the maturity date of the Bridge Financing from June 7, 2024 to June 21, 2024. On June 21, 2024, the Bridge Financing Loan Parties entered into a Third Bridge Loan Amendment Agreement with the 2024 Lenders which further extended the maturity date of the Bridge Financing from June 21, 2024 to July 8, 2024.

On July 8, 2024, the Bridge Financing Loan Parties entered into a fourth bridge loan amendment agreement which amended the Loan and Security Agreement to extend the maturity date of the bridge loan from July 8, 2024 to August 2, 2024.

On July 26, 2024, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,000 which was fully funded on July 26, 2024.

On July 29, 2024, the Bridge Financing Loan Parties entered into a fifth bridge loan amendment agreement which amended the Loan and Security Agreement to, among other things, (i) modify the availability period for subsequent drawdowns under the Bridge Financing from ten days to two days prior to the maturity date, (ii) increase the Delayed Draw Commitment, as defined in the Loan and Security Agreement, from $2,762 to $3,000, and (iii) extend the maturity date of the Bridge Financing from August 2, 2024 to August 30, 2024.

On August 30, 2024 the Bridge Financing Loan Parties entered into a sixth bridge loan amendment agreement which extended the maturity date of the Bridge Financing from August 30, 2024 to September 30, 2024.

On September 11, 2024, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,000, which was fully funded on September 11, 2024.

On September 26, 2024, the Bridge Financing Loan Parties entered into a seventh bridge loan amendment agreement which extended the maturity date of the Bridge Financing from September 30, 2024 to October 31, 2024.

On October 30, 2024, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,000, which was fully funded on November 1, 2024.

On October 31, 2024, the Bridge Financing Loan Parties entered into an eighth bridge loan amendment agreement which extended the maturity date of the Bridge Financing from October 31, 2024 to November 30, 2024.

On November 26, 2024, the Bridge Financing Loan Parties entered into a ninth bridge loan amendment agreement which (i) increased the Delayed Draw Commitment from $3,000 to $6,000, and (ii) extended the maturity date of the Bridge Financing from November 30, 2024 to December 31, 2024. The 2024 Lenders also agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,200, which was fully funded on November 26, 2024.

On December 5, 2024, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $1,500, which was fully funded on December 9, 2024.

On December 31, 2024, the Bridge Financing Loan Parties entered into a tenth bridge loan amendment agreement which extended the maturity date of the Bridge Financing from December 31, 2024 to January 31, 2025.

On January 27, 2025, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $3,000 which was fully funded on January 28, 2025.

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On January 28, 2025, the Bridge Financing Loan Parties entered into an eleventh bridge loan amendment agreement which (i) increased the Delayed Draw Commitment, as defined in the Loan and Security Agreement, from $6,000 to $11,000 and (ii) extend the maturity date of the Bridge Financing from January 31, 2025 to February 28, 2025.

On February 21, 2025, the 2024 Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,300 which was partially funded on February 21, 2025 in the amount of $2,000 with the remainder funded on March 25, 2025.

On February 28, 2025, the Bridge Financing Loan Parties entered into a twelfth bridge loan amendment agreement which extended the maturity date of the Bridge Financing from February 28, 2025 to March 31, 2025.

On March 27, 2025, the Bridge Financing Loan Parties entered into a thirteenth bridge loan Amendment Agreement which (i) extended the maturity date of the Bridge Financing from March 31, 2025 to April 30, 2025 and (ii) increase the Delayed Draw Commitment, as defined in the Loan and Security Agreement, from $11,000 to $21,000.

On April 4, 2025, the Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 which was funded on April 4, 2025.

On April 30, 2025, the Loan Parties entered into a fourteenth bridge loan amendment agreement with the Lenders which amended the Loan and Security Agreement, to extend the maturity date of the Bridge Loan from April 30, 2025 to May 31, 2025.

On May 22, 2025, the Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 which was fully funded on May 23, 2025.

On May 30, 2025, the Loan Parties entered into a fifteenth bridge loan amendment agreement with the Lenders which amended the Loan and Security Agreement, to extend the maturity date of the Bridge Loan from May 31, 2025 to June 30, 2025.

On June 30, 2025, the Loan Parties entered into a sixteenth bridge loan amendment agreement with the Holders which amended the Loan and Security Agreement to extend the maturity date of the Bridge Loan from June 30, 2025 to July 31, 2025.

On July 21, 2025, the Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 which was fully funded on July 21, 2025.

On July 31, 2025, the Loan Parties entered into a seventeenth bridge loan amendment agreement with the Holders which amended the Loan and Security Agreement to extend the maturity date of the Bridge Loan from July 31, 2025 to August 6, 2025.

On August 6, 2025, the Loan Parties entered into an eighteenth bridge loan amendment agreement with the Lenders which amended the Loan and Security Agreement to (i) extend the maturity date of the Bridge Loan from August 6, 2025 to August 31, 2025 and (ii) establish a 50% threshold for a change of control event, and (iii) add or update customary negative covenants and events of default.

On August 21, 2025, the Lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 which was fully funded on August 21, 2025.

On August 31, 2025, the Loan Parties entered into a nineteenth bridge loan amendment agreement with the Lenders which amended the Loan and Security Agreement to extend the maturity date of the Bridge Loan from August 31, 2025 to September 30, 2025.

On September 19, 2025, the lenders agreed to provide the Bridge Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 which was fully funded on September 19, 2025.

On September 30, 2025, the lenders entered into a twentieth bridge loan amendment agreement with the Lenders, which amended the Loan and Security Agreement to (i) extend the maturity date of the Bridge Loan from September 30, 2025 to October 31, 2025 and (ii) increase the delayed draw commitment from $21,000 to $26,000.

The scheduled payments, inclusive of principal and interest of $25,331 will be paid at maturity.

For the three and nine months ended September 30, 2025, the Company did not make any principal payments.

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12. EW CONVERTIBLE NOTES

On January 18, 2024, the Company, Venus USA, Venus Canada and Venus Ltd (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 “EW Investors”). Pursuant to the Note Purchase Agreement, the Company issued and sold to the EW Investors $2.0 million in aggregate principal amount of secured subordinated convertible notes (the “2024 Notes").

The 2024 Notes accrue interest at a rate equal to the 90-day adjusted term Secured Overnight Financing Rate (SOFR) plus 8.50% per annum; provided, however, that if there is an Event of Default (as defined below), the then-applicable interest rate will increase by 4.00% per annum. Interest is payable in kind in arrears on the last business day of each calendar quarter of each year after the original issuance date, beginning on March 31, 2024. The 2024 Notes mature on December 9, 2025, unless earlier redeemed or converted, at which time all outstanding principal and interest is payable in cash, except as described below. At any time prior to the maturity date, a holder may convert the 2024 Notes at their option into shares of common stock at the then-applicable conversion rate. The initial conversion rate is 72.6691 shares of common stock per one-thousand principal amount of 2024 Notes, which represents an initial conversion price of approximately $13.761 per share of common stock. The conversion rate is subject to customary anti-dilution adjustments. The 2024 Notes are redeemable, in whole and not in part, at the Company’s option at any time, at a redemption price equal to the principal amount of the 2024 Notes to be redeemed, plus accrued and unpaid interest, if any, to, the redemption date, plus a redemption premium. The Company’s redemption option is subject to satisfaction of the conditions set forth in the 2024 Notes, including that a registration statement covering the resale of the shares of common stock issuable upon conversion of the 2024 Notes is effective and available for use.

The 2024 Notes have customary provisions relating to the occurrence of “Events of Default,” as defined in the 2024 Notes. If an Event of Default occurs, then the EW Investors may, subject to the terms of the CNB Subordination Agreement (as defined below), (i) declare the outstanding principal amount of the 2024 Notes, all accrued and unpaid interest and all other amounts owing under the 2024 Notes and other transaction documents entered into in connection therewith to be immediately become due and payable, without any further action or notice by any person, and (ii) exercise all rights and remedies available to them under the 2024 Notes, the EW Security Agreement (as defined below) and any other document entered into in connection with the foregoing. The 2024 Notes constitute the Company’s secured, subordinated obligations and are (i) equal in right of payment with the Company’s existing and future senior unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2024 Notes; and (iii) subordinated to the Company’s existing secured indebtedness in a manner consistent with the Existing Subordination Agreements (as defined below).

On January 18, 2024, the Company and the Guarantors entered into a Guaranty and Security Agreement (the “EW Security Agreement”) with EW, as collateral agent. Pursuant to the EW Security Agreement, the Guarantors jointly and severally guaranteed to the EW Investors the prompt payment of all outstanding amounts under the 2024 Notes when due. The Guarantors also granted to the EW Investors a security interest in substantially all of their assets to secure the obligations under the 2024 Notes.

Pursuant to the EW Security Agreement, during the continuance of an Event of Default under the 2024 Notes, if the Company is unable to repay all outstanding amounts under the 2024 Notes, the EW Investors may, subject to the terms of the CNB Subordination Agreement (as defined below), foreclose on the collateral to collateralize such indebtedness. Any such foreclosure could significantly affect the Company’s ability to operate its business.

The EW Security Agreement contains various covenants that limit the Company’s ability to engage in specified types of transactions. Subject to limited exceptions, these covenants include restrictions on the Company’s ability, to incur, create or permit to exist additional indebtedness, or liens, and to make certain changes to its ownership structure, in each case without the Investor’s consent.

On January 18, 2024, the Company and the Guarantors entered into a Subordination of Debt Agreement (the “CNB Subordination Agreement”) with CNB and the EW Investors. The CNB Subordination Agreement provides that the 2024 Notes are subordinated to the Company’s existing secured indebtedness with CNB, in a manner consistent with the subordination of the Secured Subordinated Convertible Notes, dated October 4, 2023 (the “Madryn Notes”), issued to Madryn pursuant to those certain existing Subordination of Debt Agreements, dated as of December 8, 2020 entered into by the Company and the Guarantors, CNB, and Madryn (the “Existing Subordination Agreements”). The 2024 Notes and the Madryn Notes are secured by the same collateral, except that the 2024 Notes also receive a first priority perfected security interest and lien on the Company’s right to receive certain amounts from the Internal Revenue Service in respect of certain employee retention credits claimed by the Company (defined in the Notes as the “ERC Claim”).

On February 28, 2025, Guarantors and EW Investors entered into an Amendment to Secured Subordinated Convertible Notes agreement (the “EW Note Amendment”). The EW Note Amendment amends the EW Notes to extend the maturity date of the EW Notes from December 9, 2025 to December 9, 2026.

As of September 30, 2025, the Company had approximately $2,524 of principal and interest of the 2024 convertible notes outstanding that were issued pursuant to the Note Purchase Agreement (as defined below).

In connection with the 2024 Notes, the Company recognized interest expense of $85 and $243 during the three and nine months ended September 30, 2025, respectively ($74 and $204 during the three and nine months ended September 30, 2024, respectively). The 2024 Notes contained a conversion option, redemption right upon an event of default, change of control scenario, and interest rate penalty upon an event of default which were evaluated under ASC 815, Derivatives and Hedging, and determined that these features required bifurcation. These embedded derivatives were accounted for as liabilities at their estimated fair value as of the date of issuance, and then subsequently remeasured to fair value as of each balance sheet date, with the related remeasurement adjustment being recognized as a component of change in fair value of derivative liabilities in the condensed consolidated statements of operations. The fair value of the embedded derivative liability at issuance and as of September 30, 2025 were $0.9 million and $0.1 million, respectively.

As of September 30, 2025 and December 31, 2024, the Company was in compliance with all required covenants. The scheduled payments, inclusive of principal and interest of $2,965 are due in 2026. For the three and nine months ended September 30, 2025, the Company did not make any principal payments.

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13. COMMON STOCK RESERVED FOR ISSUANCE

The Company is required to reserve and keep available out of its authorized but unissued shares of common stock a number of shares sufficient to affect the exercise of all classes of preferred stock, convertible promissory notes, options granted and available for grant under the incentive plans and warrants to purchase common stock.

	*September 30, 2025*		*December 31, 2024*
Outstanding common stock warrants		1,062,584		153,147
Outstanding stock options and RSUs		72,687		89,325
Preferred shares		19,244,658		7,852,840
Shares reserved for conversion of future voting preferred share issuance		475,243		500,735
Shares reserved for future option grants and RSUs		74,086		29,094
Shares reserved for Madryn Noteholders		—		118,182
Shares reserved for EW Noteholders		190,910		190,910
Total common stock reserved for issuance		21,120,168		8,934,233

14. STOCKHOLDERS' EQUITY

Common Stock

The Company’s common stock confers upon its holders the following rights:

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The right to participate and vote in the Company’s stockholder meetings, whether annual or special. Each share will entitle its holder, when attending and participating in the voting in person or via proxy, to one vote;

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The right to a share in the distribution of dividends, whether in cash or in the form of bonus shares, the distribution of assets or any other distribution pro rata to the par value of the shares held by them; and

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The right to a share in the distribution of the Company’s excess assets upon liquidation pro rata to the par value of the shares held by them.

Reverse Stock Split

At the special meeting of the Company’s shareholders held on February 14, 2025, the Company’s shareholders granted the Company’s Board discretionary authority to implement a reverse stock split and to fix the specific consolidation ratio within a range of one-for-five (1-for-5) to one-for-sixteen (1 for 16). On February 28, 2025, the Company filed an amendment to the Company’s Certificate of Incorporation to implement a 1-for-11 reverse stock split (the "Reverse Stock Split") consolidation ratio on March 3, 2025. The Company’s common shares began trading on the Nasdaq Capital Market on a reverse split-adjusted basis under the Company’s existing trade symbol “VERO” at the opening of the market on March 4, 2025.

Equity Purchase Agreement with Lincoln Park

On June 16, 2020, the Company entered into a purchase agreement (the “Equity Purchase Agreement”) with Lincoln Park Capital Fund LLC (“Lincoln Park”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $31,000 worth of shares of its common stock, par value $0.0001 per share, pursuant to its shelf registration statement. The purchase price of shares of common stock related to a future sale will be based on the then prevailing market prices of such shares at the time of sales as described in the Equity Purchase Agreement. The aggregate number of shares that the Company can sell to Lincoln Park under the Equity Purchase Agreement may in no case exceed 47,050 shares (subject to adjustment) of common stock (which is equal to approximately 19.99% of the shares of the common stock outstanding immediately prior to the execution of the Equity Purchase Agreement) (the “Exchange Cap”), unless (i) stockholder approval is obtained to issue shares above the Exchange Cap, in which case the Exchange Cap will no longer apply, or (ii) with Equity Purchase Agreement equals or exceeds $655.9575 per share (subject to adjustment) (which represents the minimum price, as defined under Nasdaq Stock Market LLC ("Nasdaq") Listing Rule 5635(d), on the Nasdaq Global Market immediately preceding the signing of the Equity Purchase Agreement, such that the transactions contemplated by the Equity Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules.) Also, at no time may Lincoln Park (together with its affiliates) beneficially own more than 9.99% of the Company’s issued and outstanding common stock. Concurrently with entering into the Equity Purchase Agreement, the Company also entered into a registration rights agreement with Lincoln Park, pursuant to which it agreed to provide Lincoln Park with certain registration rights related to the shares of common stock issued under the Equity Purchase Agreement (the “Registration Rights Agreement”).

From commencement to expiry on July 1, 2022, the Company issued and sold to Lincoln Park 20,831 shares of its common stock at an average price of $445.50 per share, and 1,271 of these shares were issued to Lincoln Park as a commitment fee in connection with entering into the Equity Purchase Agreement (the “Commitment Shares”). The total value of the Commitment Shares of $620 together with the issuance costs of $123 were recorded as deferred issuance costs in the consolidated balance sheet at inception and were amortized into consolidated statements of stockholders’ equity proportionally based on proceeds received during the term of the Equity Purchase Agreement. In 2022, the Company issued 2,425 shares of its common stock and the proceeds from common stock issuances as of December 31, 2022 were $272, with no issuance costs. The proceeds in the amount of $272 were recorded in the condensed consolidated statements of cash flows as net cash proceeds from issuance of common stock. The Equity Purchase Agreement expired on July 1, 2022, and was replaced with the 2022 LPC Purchase Agreement discussed below.

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2022 LPC Purchase Agreement with Lincoln Park

On July 12, 2022, the Company entered into a purchase agreement (the “2022 LPC Purchase Agreement”) with Lincoln Park, as the Equity Purchase Agreement expired on July 1, 2022. The 2022 LPC Purchase Agreement provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company may sell to Lincoln Park up to $11,000 of shares (the “Purchase Shares”) of its common stock, par value $0.0001 per share. Concurrently with entering into the 2022 LPC Purchase Agreement, the Company also entered into a registration rights agreement (the “2022 LPC Registration Rights Agreement”) with Lincoln Park, pursuant to which it agreed to provide Lincoln Park with certain registration rights related to the shares issued under the 2022 LPC Purchase Agreement. The aggregate number of shares that the Company can issue to Lincoln Park under the 2022 LPC Purchase Agreement may not exceed 78,020 shares of common stock, which is equal to 19.99% of the shares of common stock outstanding immediately prior to the execution of the 2022 LPC Purchase Agreement (the “2022 Exchange Cap”), unless (i) stockholder approval is obtained to issue shares of common stock in excess of the 2022 Exchange Cap, in which case the 2022 Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of common stock to Lincoln Park under the 2022 LPC Purchase Agreement equals or exceeds the lower of (i) the Nasdaq official closing price immediately preceding the execution of the 2022 LPC Purchase Agreement or (ii) the arithmetic average of the five Nasdaq official closing prices for the common stock immediately preceding the execution of the 2022 LPC Purchase Agreement, plus an incremental amount to take into account the issuance of the Commitment Shares to Lincoln Park under the 2022 LPC Purchase Agreement, such that the transactions contemplated by the 2022 LPC Purchase Agreement are exempt from the 2022 Exchange Cap limitation under applicable Nasdaq rules. In all instances, the Company may not sell shares of its common stock to Lincoln Park under the 2022 LPC Purchase Agreement if it would result in Lincoln Park beneficially owning more than 9.99% of the outstanding shares of common stock. Upon execution of the 2022 LPC Purchase Agreement, the Company issued 4,155 shares of common stock to Lincoln Park as a commitment fee in connection with entering into the 2022 LPC Purchase Agreement at the total amount of $330. Through December 31, 2023 the Company issued an additional 70,587 shares of common stock to Lincoln Park at an average price of $43.626 per share for a total value of $3,080. During the year ended December 31, 2024, the Company issued an additional 758 shares of common stock to Lincoln Park at an average price of $12.76 per share, for a total value of $10. The 2022 LPC Purchase Agreement expired on August 1, 2024.

The 2022 Private Placement

In November 2022, we entered into a securities purchase agreement with certain investors (collectively, the "2022 Investors") pursuant to which the Company issued and sold to the 2022 Investors an aggregate of 10,608 shares of common stock, par value $0.0001 per share, and 3,185,000 shares of voting convertible preferred stock, par value $0.0001 per share (the "Voting Preferred Stock"), which are convertible into 193,014 shares of common stock upon receipt of a valid conversion notice from a 2022 Investor or at the option of the Company within 30 days following the occurrence of certain events (the "2022 Private Placement"). The 2022 Private Placement was completed on November 18, 2022. The gross proceeds from the securities sold in the 2022 Private Placement was $6,720 before offering expenses. The costs incurred with respect to the 2022 Private Placement totaled $202 and were recorded as a reduction of the 2022 Private Placement proceeds in the consolidated statements of stockholders' equity.

Voting Preferred Stock issued in November 2022

As noted above, in November 2022, the Company issued and sold to certain 2022 Investors an aggregate of 3,185,000 shares of Voting Preferred Stock. The terms of the Voting Preferred Stock are governed by a Certificate of Designation filed by the Company with the Secretary of State of the State of Delaware on November 17, 2022. The following is a summary of the material terms of the Voting Preferred Stock:

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Voting Rights. The Voting Preferred Stock votes with the common stock on an as-converted basis.

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Liquidation. Each share of Voting Preferred Stock carries a liquidation preference, senior to the common stock in an amount equal to the greater of (a) $30.00 (being the issuance price) and (b) the amount that would be distributed in respect of such share of Voting Preferred Stock if it were converted into common stock and participated in such liquidating distribution with the other shares of common stock.

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Conversion. The Voting Preferred Stock will convert into shares of common stock on a one for 0.0606 basis (i) at the option of a 2022 Investor upon delivery of a valid conversion notice to the Company or (ii) at the option of the Company within 30 days following the earlier to occur of (a) the date on which the volume-weighted average price of the common stock has been greater than or equal to $206.25 for 30 consecutive trading days and (b) the date on which the Company has reported two consecutive fiscal quarters of positive cash flow.

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Dividends. Each share of Voting Preferred Stock is entitled to participate in dividends and other non-liquidating distributions (if, as and when declared by the Board of the Company) on an as-converted basis, pari passu with the common stock.

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Redemption. The Voting Preferred Stock is not redeemable at the election of the Company or at the election of the holder.

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Maturity. The Voting Preferred Stock shall be perpetual unless converted.

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The 2023 Multi-Tranche Private Placement

In May 2023, we entered into a securities purchase agreement (the "2023 Multi-Tranche Private Placement Stock Purchase Agreement") with certain investors (collectively, the "2023 Investors") pursuant to which the Company may issue and sell to the 2023 Investors up to $9,000,000 in shares (the "2023 Multi-Tranche Private Placement") of newly-created senior convertible preferred stock, par value $0.0001 per share (the “Senior Preferred Stock”), in multiple tranches from time to time until December 31, 2025, subject to a minimum aggregate purchase amount of $0.5 million in each tranche. The initial sale in the 2023 Multi-Tranche Private Placement occurred on May 15, 2023, under which the Company sold the 2023 Investors 280,899 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million (the "Initial Placement"). The Company used the proceeds of the Initial Placement, after the payment of transaction expenses, for general working capital purposes. The following is a summary of the material terms of the Senior Preferred Stock:

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Voting Rights. The Senior Preferred Stock has aggregate number of votes equal to the product of (a) the quotient of (i) the aggregate purchase price paid under the Stock Purchase Agreement for all shares of Senior Preferred Stock issued and outstanding as of such time, divided by (ii) the highest purchase price paid by a holder for a share of Senior Preferred Stock prior to or as of such time, multiplied by (b) two. Such formula ensures that no share of senior preferred stock will ever have more than two votes per share, with such number of votes subject to reduction (but not increase) depending on the pricing of future sales of Senior Preferred Stock in the Private Placement. The Senior Preferred Stock votes with the Company’s common stock on all matters submitted to holders of common stock and does not vote as a separate class.

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Liquidation. Each share of Senior Preferred Stock carries a liquidation preference, senior to the common stock and Voting Preferred Stock, in an amount equal to the product of the Purchase Price for such share, multiplied by 2.50.

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Conversion. The Senior Preferred Stock will convert into shares of common stock on a one for 0.2424 basis at the option of (a) the investors at any time or (b) the Company within 30 days following the date on which the 30-day volume-weighted average price of the common stock exceeds the product of (i) the Purchase Price for the shares of senior preferred stock to be converted, multiplied by (ii) 2.75.

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Dividends. Each share of Senior Preferred Stock is entitled to participate in dividends and other non-liquidating distributions (if, as and when declared by the Board of the Company) on an as-converted basis, pari passu with the common stock and Voting Preferred Stock.

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Redemption. The Senior Preferred Stock is not redeemable at the election of the Company or at the election of the holder.

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Maturity. The Senior Preferred Stock shall be perpetual unless converted.

On July 6, 2023, the Company and the 2023 Investors entered into an amendment to the 2023 Multi-Tranche Private Placement Stock Purchase Agreement (the “Multi-Tranche Amendment”). The Multi-Tranche Amendment (a) clarifies the appropriate date pursuant to which the purchase price for each share of Senior Preferred Stock to be sold in the Private Placement is determined (such that the purchase price shall be equal to the “Minimum Price” as set forth in Nasdaq Listing Rule 5635(d)) and (b) permits the Company to specify a desired closing date (subject to approval by the 2023 Investors) for each sale in the 2023 Multi-Tranche Private Placement.

On July 12, 2023, the Company and the 2023 Investors consummated the second tranche in the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 500,000 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million (the “Second Placement”). The Company used the proceeds of the Second Placement, after the payment of transaction expenses, for general working capital purposes.

On September 8, 2023, the Company and the 2023 Investors consummated the third tranche in the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 292,398 shares of Senior Preferred Stock for an aggregate purchase price of $1.0 million (the "Third Placement," and together with the First Placement and Second Placement, the "Placements"). The Company used the proceeds of the Third Placement, after the payment of transaction expenses, for general working capital purposes.

On October 20, 2023, the Company and the 2023 Investors consummated the fourth tranche in the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 502,513 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million (the “Fourth Placement”). The Company used the proceeds of the Fourth Placement, after the payment of transaction expenses, for general working capital purposes.

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Series X Convertible Preferred Stock

On October 4, 2023, the Company filed a Certificate of Designations with respect to the Series X Preferred Stock with the Secretary of State of the State of Delaware, thereby creating the Series X Preferred Stock. The Certificate of Designations authorizes the issuance of up to 400,000 shares of Series X Preferred Stock. The Series X Preferred Stock is convertible into shares of common stock on a one-for-0.9091 basis, in whole or in part, at the option of the holder at any time upon delivery of a valid conversion notice of the Company; provided, however, that the Series X Preferred Stock is subject to limitations on convertibility to the extent necessary to comply with the rules and regulations of the Nasdaq. The following is a summary of the material terms of the Series X Preferred Stock:

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Voting Rights. The holders of the Series X Preferred Stock shall be entitled to vote on all matters on which holders of common stock shall be entitled to vote, and shall be entitled to a number of votes equal to the Converted Stock Equivalent, which is 0.9091 common shares per 1 Series X Preferred stock.

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Liquidation. Each share of Series X Preferred Stock carries a liquidation preference, senior to the common stock and Voting Preferred Stock, in an amount equal to the Issuance Price (as defined in the Certificate of Designations with respect to the Series X Preferred Stock).

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Conversion. The Series X Preferred Stock will convert into shares of common stock on a 1-for-0.9091 basis at the option of the holders of Series X Preferred Stock at any time.

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Dividends. The Series X Preferred Stock accrues a dividend at a rate of 12.5% per annum, payable on a quarterly basis in cash or additional shares of Series X Preferred Stock, at the Company’s election. In addition, each share of Series X Preferred Stock is entitled to participate in dividends and other non-liquidating distributions, if, as and when declared by the Board, on a pari passu basis with the common stock, Senior Preferred Stock and Junior Preferred Stock.

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Redemption. The Series X Preferred Stock is not redeemable at the election of the Company or at the election of the holder.

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Maturity. The Series X Preferred Stock shall be perpetual unless converted, however dividends will stop accruing on December 31, 2026.

Series Y Convertible Preferred Stock

On May 24, 2024, the Company filed a Certificate of Designations with respect to the Series Y Preferred Stock with the Secretary of State of the State of Delaware, thereby creating the Series Y Preferred Stock. The Certificate of Designations authorizes the issuance of up to 600,000 shares of Series Y Preferred Stock. The Series Y Preferred Stock is convertible into shares of common stock on a 1-for-9.0909 basis, at the option of the holder, in whole or in part, at any time upon delivery of a valid conversion notice of the Company; or (ii) automatically upon the Company completing an equity financing for common stock (or convertible preferred stock, provided that under such circumstances such financing will not be deemed completed until such preferred stock has been fully converted into common stock) that raises no less than $30.0 million in gross proceeds, among other requirements as set forth in the Certificate of Designations. Notwithstanding the foregoing, the Series Y Preferred Stock is subject to limitations on convertibility to the extent necessary to comply with the rules and regulations of Nasdaq. On September 26, 2024 the Company filed a Certificate of Amendment which increased the authorized number of shares of Series Y Preferred Stock from 600,000 shares to 900,000 shares. On March 31, 2025, the Company filed a Certificate of Amendment which, among other things, (i) increased the authorized shares of Series Y Preferred Stock from 900,000 to 1,200,000 and (ii) clarified that the conversion ratio of Series Y Preferred Stock-to-Common Stock is 1-for-9.0909 (instead of 1-for-100) following the 1-for-11 reverse split of the Common Stock, which occurred on March 3, 2025. On June 30, 2025, the Company filed a Certificate of Amendment amending the Certificate of Designations with respect to the Series Y Preferred Stock to, among other things, increase the authorized shares of Series Y Preferred Stock from 1,200,000 to 1,500,000. On August 6, 2025, the Company filed a Certificate of Amendment which, among other things, eliminates the provisions that provide for the automatic conversion of the Series Y Preferred Stock into common stock upon the occurrence of the certain conditions set forth in the Certificate of Designations. On September 30, 2025 the Company filed a Certificate of Amendment which increased the authorized number of shares of Series Y Preferred Stock from 1,500,000 to 2,100,000 shares. The following is a summary of the material terms of the Series Y Preferred Stock:

•

Voting Rights. The holders of the Series Y Preferred Stock shall not be entitled to vote on any matter on which holders of common stock shall be entitled to vote.

•

Liquidation. Each share of Series Y Preferred Stock carries a liquidation preference, senior to the common stock, Series X Preferred Stock, Senior Preferred Stock, and Junior Preferred Stock, in an amount equal to the product of the Issuance Price (as defined in the Certificate of Designations with respect to the Series Y Preferred Stock), multiplied by 2.0.

•

Conversion. The Series Y Preferred Stock will convert into shares of common stock on a 1-for-9.0909 basis at the option of the holders of Series Y Preferred Stock at any time.

•

Dividends. Each share of Series Y Preferred Stock is entitled to participate in dividends and other non-liquidating distributions, if, as and when declared by the Board, on a pari passu basis with the common stock, Senior Preferred Stock and Junior Preferred Stock.

•

Redemption. The Series Y Preferred Stock is not redeemable at the election of the Company or at the election of the holder.

•

Maturity. The Series Y Preferred Stock shall be perpetual unless converted.

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Registered Direct Offering - February 2024

On February 22, 2024, the Company, entered into a securities purchase agreement (the “SPA”) with certain institutional investors (each, a “2024 Investor”), pursuant to which the Company agreed to issue and sell to the 2024 Investors (i) in a registered direct offering, an aggregate of 74,342 shares of the Company’s common stock, at a price of $16.115 per share and (ii) in a concurrent private placement, warrants to acquire up to an aggregate of 74,342 shares of common stock (the “2024 Investor Warrants”), at an initial exercise price of $14.74 per share (the “Offering”).

The Shares were offered at-the-market under Nasdaq rules and pursuant to the Company’s shelf registration statement on Form S-3 initially filed by the Company with the SEC under the Securities Act, on October 15, 2021 and declared effective on October 25, 2021.

The 2024 Investor Warrants (and the shares of common stock issuable upon the exercise of the 2024 Investor Warrants) were not registered under the Securities Act and were offered pursuant to an exemption from the registration requirements provided under Section 4(a)(2) of the Securities Act. The 2024 Investor Warrants are exercisable upon issuance and will expire five years from the issuance date, and in certain circumstances may be exercised on a cashless basis. If the Company fails for any reason to deliver shares of common stock upon the valid exercise of the 2024 Investor Warrants within the prescribed period set forth in the 2024 Investor Warrants, the Company is required to pay the applicable holder liquidated damages in cash as set forth in the 2024 Investor Warrants.

A holder is not entitled to exercise any portion of a 2024 Investor Warrant, if, after giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates and any other persons) whose beneficial ownership of common stock would or could be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act would exceed 4.99%, or at the election of a 2024 Investor 9.99%, of the common stock outstanding after giving effect to the exercise. Such 4.99% limitation may be increased at the holder’s election upon 61 days’ notice to the Company, provided that such percentage may not exceed 9.99%.

On February 27, 2024, the Company closed the Offering, raising gross proceeds of approximately $1.2 million before deducting placement agent fees and other offering expenses payable by the Company. The proceeds received in the Offering were allocated to each instrument on a relative fair value basis.

Under the SPA, no later than March 8, 2024, the Company was required to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) registering the resale of the shares of common stock issued or issuable upon exercise of the 2024 Investor Warrants. The Company was required to use commercially reasonable efforts to cause such registration to become effective within 45 days of the closing date of the Offering (or within 75 days following the closing of the Offering in case of “full review” of the registration statement by the SEC), and to keep the registration statement effective at all times until no 2024 Investor owns any 2024 Investor Warrants or shares issuable upon exercise thereof.

The SPA contains customary representations, warranties and covenants by the Company, among other customary provisions.

H.C. Wainwright & Co., LLC (“HCW”) acted as the Company’s placement agent in connection with Offering. The Company paid HCW consideration consisting of (i) a cash fee equal to 7.0% of the aggregate gross proceeds in the Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds in the Offering, (iii) reimbursement of certain expenses and (iv) warrants to acquire up to an aggregate of 5,204 shares of common stock (the “February 22 Placement Agent Warrants”). The February 22 Placement Agent Warrants are substantially similar to the 2024 Investor Warrants, except that the initial exercise price of the February 22 Placement Agent Warrants is $20.1438 per share.

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Registered Direct Offerings – April 2025

On April 9, 2025, the Company entered into a securities purchase agreement (the “April 9 SPA”) with certain institutional investors (each, an “April 9 Investor”), pursuant to which the Company agreed to issue and sell to the April 9 Investors in a registered direct offering an aggregate of 328,573 shares (the “April 9 Shares”) of the Company’s common stock, par value $0.0001 per share at a price of $3.50 per share (the “April 9 Offering”).

The Company closed the April 9 Offering on April 10, 2025, raising gross proceeds of approximately $1.1 million before deducting placement agent fees and other expenses payable by the Company.

On April 11, 2025, the Company entered into a securities purchase agreement (the “April 11 SPA”) with certain institutional investors (each, an “April 11 Investor”), pursuant to which the Company agreed to issue and sell to the April 11 Investors in a registered direct offering an aggregate of 386,700 shares (the “April 11 Shares”) of the Company’s common stock, par value $0.0001 per share at a price of $4.06 per share (the “April 11 Offering”).

The Company closed the April 11 Offering on April 14, 2025, raising gross proceeds of approximately $1.6 million before deducting placement agent fees and other expenses payable by the Company.

The April 9 Shares and April 11 Shares were offered at-the-market under Nasdaq rules and pursuant to the Company’s shelf registration statement on Form S-3 (File 333-282811), initially filed by the Company with the SEC under the Securities Act on October 24, 2024 and declared effective on November 1, 2024.

The April 9 SPA and April 11 SPA contain customary representations, warranties and covenants by the Company, among other customary provisions.

HCW acted as the Company’s placement agent in connection with the April 9 Offering and the April 11 Offering. For each offering, the Company paid HCW consideration consisting of (i) a cash fee equal to 7.0% of the gross proceeds in the respective offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds in the respective offering, (iii) reimbursement of certain expenses and (iv) warrants to acquire up to an aggregate of (i) 23,000 shares of common stock in the April 9 Offering and (ii) 27,069 shares of common stock in the April 11 Offering (together, the “April 2025 Placement Agent Warrants”).

The April 2025 Placement Agent Warrants (and the shares of common stock issuable upon the exercise of the April 2025 Placement Agent Warrants) were offered pursuant to an exemption from the registration requirements of the Securities Act provided under Section 4(a)(2) of the Securities Act. The April 2025 Placement Agent Warrants have an initial exercise price of $4.375 per share for the April 9 Offering and $5.075 per share for the April 11 Offering, are immediately exercisable and expire five years from the issuance date, and in certain circumstances may be exercised on a cashless basis. A holder is not entitled to exercise any portion of a Placement Agent Warrant, if, after giving effect to such exercise, the aggregate number of shares of common stock beneficially owned by the holder (together with its affiliates and any other persons) whose beneficial ownership of common stock would or could be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Exchange Act) would exceed 4.99%, or at the election of the April 9 Investor 9.99%, of the common stock outstanding after giving effect to the exercise. Such 4.99% limitation may be increased at the holder’s election upon 61 days’ notice to the Company, provided that such percentage may not exceed 9.99%.

Registered Direct Offering – June 2025

On June 6, 2025, the Company, entered into a securities purchase agreement (the “June 6 SPA”) with certain institutional investors (each, “a June 6 Investor”), pursuant to which the Company agreed to issue and sell to the June 6 Investor (i) in a registered direct offering, an aggregate of 434,720 shares of the Company’s common stock, par value $0.0001 per share, at a price of $2.65 per share and (ii) in a concurrent private placement, warrants to acquire up to an aggregate of 869,440 shares of common stock (the “2025 Investor Warrants”), at an initial exercise price of $2.65 per share (the “June 6 Offering”).

The Shares were offered at-the-market under Nasdaq rules and pursuant to the Company’s shelf registration statement on Form S-3 initially filed by the Company with the SEC under the Securities Act on October 24, 2024 and declared effective on November 1, 2024.

The 2025 Investor Warrants (and the shares of Common Stock issuable upon the exercise of the 2025 Investor Warrants) were not registered under the Securities Act, and were offered pursuant to an exemption from the registration requirements of the Securities Act provided under Section 4(a)(2) of the Securities Act. The 2025 Investor Warrants are exercisable upon issuance and will expire on the eighteen month anniversary of the effective date of the Resale Registration Statement (as defined below), and in certain circumstances may be exercised on a cashless basis. If the Company fails for any reason to deliver shares of Common Stock upon the valid exercise of the 2025 Investor Warrants within the prescribed period set forth in the 2025 Investor Warrants, the Company is required to pay the applicable holder liquidated damages in cash as set forth in the 2025 Investor Warrants. The 2025 Investor Warrants also include customary buy-in rights in the event the Company fails to deliver shares of Common Stock upon exercise thereof within the prescribed period as set forth in the Investor Warrants.

A holder is not be entitled to exercise any portion of a 2025 Investor Warrant, if, after giving effect to such exercise, the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates and any other persons) whose beneficial ownership of Common Stock would or could be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Securities Exchange Act would exceed 4.99%, or at the election of the June 6 Investor 9.99%, of the Common Stock outstanding after giving effect to the exercise. Such 4.99% limitation may be increased at the holder’s election upon 61 days’ notice to the Company, provided that such percentage may not exceed 9.99%.

On June 9, 2025, the Company closed the June 6 Offering, raising gross proceeds of approximately $1.15 million before deducting placement agent fees and other offering expenses payable by the Company. The Company intends to use the net proceeds from the June 6 Offering for working capital and general corporate purposes.

On June 20, 2025, under the terms of the June 6 SPA, the Company filed a registration statement on Form S-1 (File No. 333-288215), as amended on July 24, 2025, that was declared effective by the SEC on July 28, 2025, that registered the resale of the shares of Common Stock issued or issuable upon exercise of the Investor Warrants (the “Resale Registration Statement”).

HCW acted as the Company’s placement agent in connection with June 6 Offering. The Company paid HCW consideration consisting of (i) a cash fee equal to 7.0% of the aggregate gross proceeds in the June 6 Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds in the June 6 Offering, (iii) reimbursement of certain expenses and (iv) warrants to acquire up to an aggregate of 30,430 shares of Common Stock (the “June 6 Placement Agent Warrants”). The June 6 Placement Agent Warrants are substantially similar to the Investor Warrants, except that the initial exercise price of the June 6 Placement Agent Warrants is $3.3125 per share.

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2010 Share Option Plan

In November 2010, the Board adopted a share option plan (the “2010 Share Option Plan”) pursuant to which shares of the Company’s common stock are reserved for issuance upon the exercise of options to be granted to directors, officers, employees and consultants of the Company. The 2010 Share Option Plan is administered by the Board, which designates the options and dates of grant. Options granted vest over a period determined by the Board, originally had a contractual life of seven years, which was extended to ten years in November 2017 and are non-assignable except by the laws of descent. The Board has the authority to prescribe, amend and rescind rules and regulations relating to the 2010 Share Option Plan, provided that any such amendment or rescindment that would adversely affect the rights of an optionee that has received or been granted an option shall not be made without the optionee’s written consent. As of September 30, 2025, the number of shares of the Company’s common stock reserved for issuance and available for grant under the 2010 Share Option Plan was 6,574 (3,155 as of December 31, 2024).

2019 Incentive Award Plan

The 2019 Incentive Award Plan (the “2019 Plan”) was originally established under the name Restoration Robotics, Inc., as the 2017 Incentive Award Plan. It was adopted by the Board on September 12, 2017 and approved by the Company’s stockholders on September 14, 2017. The 2017 Incentive Award Plan was amended, restated, and renamed as set forth above, and was approved by the Company’s stockholders on October 4, 2019.

Under the 2019 Plan, 2,728 shares of common stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, performance stock awards, performance stock unit awards, restricted stock awards, restricted stock unit awards and other stock-based awards, plus the number of shares remaining available for future awards under the 2019 Plan as of the date we completed our business combination with Venus Ltd. and the business of Venus Ltd. became the primary business of the Company (the “Merger”). As of September 30, 2025, there were 60,845 shares of common stock available under the 2019 Plan (25,939 as of December 31, 2024). The 2019 Plan contains an “evergreen” provision, pursuant to which the number of shares of common stock reserved for issuance pursuant to awards under such plan shall be increased on the first day of each year from 2020 and ending in 2029 equal to the lesser of (A) four percent (4.00%) of the shares of stock outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares of stock as determined by the Board.

The Company recognized stock-based compensation for its employees and non-employees in the accompanying condensed consolidated statements of operations as follows:

	*Three Months Ended September 30,*					*Nine Months Ended September 30,*
	*2025*			*2024*		*2025*		*2024*
Cost of sales	$	(14	)	$	9	$	24	$	28
Selling and marketing		35			58		126		190
General and administrative		82			148		287		524
Research and development		32			24		42		75
Total stock-based compensation	$	135		$	239	$	479	$	817

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Stock Options

The fair value of each option is estimated at the date of grant using the Black-Scholes option pricing formula with the following assumptions:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Expected term (in years)		-		-		—		6.00
Risk-free interest rate		-		-		—		4.23	%
Expected volatility		-		-		—		43.06	%
Expected dividend rate		-		-		—		0	%

Expected Term—The expected term represents management’s best estimate for the options to be exercised by option holders.

Volatility—Since the Company does not have a trading history for its common stock, the expected volatility was derived from the historical stock volatilities of comparable peer public companies within its industry that are considered to be comparable to the Company’s business over a period equivalent to the expected term of the stock-based awards.

Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock-based awards’ expected term.

Dividend Rate—The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its common stock in the foreseeable future.

Fair Value of Common Stock— Prior to the Merger, Venus Ltd. used the price per share in its latest sale of securities as an estimate of the fair value of its ordinary shares. After the closing of the Merger, the fair value of the Company’s common stock is used to estimate the fair value of the stock-based awards at grant date.

The following table summarizes stock option activity under the Company’s stock option plan:

	Number of Shares			Weighted- Average Exercise Price per Share, $		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding – January 1, 2025		89,325		$	192.68		6.88	$	—
Options granted		-			-		-		—
Options exercised		-			-		-		—
Options forfeited/cancelled		(16,638	)		206.30		-		—
Outstanding – September 30, 2025		72,687			189.56		6.47		—
Exercisable – September 30, 2025		53,626			238.01		6.14
Expected to vest – after September 30, 2025		19,061			53.25		7.40		—

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The following tables summarize information about stock options outstanding and exercisable at September 30, 2025:

	Options Outstanding						Options Exercisable
Exercise Price Range	Number		Weighted average remaining contractual term (years)		Weighted average Exercise Price		Options exercisable		Weighted average remaining contractual term (years)		Weighted average Exercise Price
$7.75 - $600.60	69,835		6.64		$143.91		50,778		6.35		$178.03
$702.90 - $1,311.75	2,648		2.31		1,113.50		2,644		2.31		1,113.20
$2,054.25 - $4,207.50	159		2.92		3,033.98		159		2.92		3,033.98
$4,455.00 - $4,826.25	18		0.24		4,475.63		18		0.24		4,475.63
$7,152.75 - $10,543.50	27		2.69		8,044.67		27		2.69		8,044.67
		72,687		6.47	$	189.56		53,626		6.14	$	238.01

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The total intrinsic value of options exercised were $nil and $nil for the three months ended September 30, 2025 and 2024, respectively. The total intrinsic value of options exercised were $nil and $nil for the nine months ended September 30, 2025 and 2024, respectively.

The weighted-average grant date fair value of options granted was $nil and $nil per share for the three months ended September 30, 2025 and 2024, respectively. The weighted-average grant date fair value of options granted was $nil and $0.705 per share for the nine months ended September 30, 2025 and 2024, respectively. The fair value of options vested during the three months ended September 30, 2025 and 2024 was $136 and $255, respectively. The fair value of options vested during the nine months ended September 30, 2025 and 2024 was $542 and $892, respectively.

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15. INCOME TAXES

The Company generated a loss and recognized $531 of tax expense for the three months ended September 30, 2025, and $31 of tax benefit for the three months ended September 30, 2024, respectively. The Company generated a loss and recognized $1,083 of tax expense for the nine months ended September 30, 2025 and $147 of tax expense for the nine months ended September 30, 2024, respectively. A reconciliation of income tax expense is as follows:

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2025*			*2024*			*2025*			*2024*
Loss before income taxes	$	(22,018	)	$	(9,333	)	$	(45,574	)	$	(38,808	)
Theoretical tax expense at the statutory rate (21% in 2025 and 2024)		(4,623	)		(1,960	)		(9,571	)		(8,150	)
Differences in jurisdictional tax rates		(838	)		(437	)		(1,752	)		(1,807	)
Valuation allowance		(2,120	)		2,282			3,347			9,604
Non-deductible expenses		357			84			550			500
Book to tax filing adjustments		7,755			—			8,509			—
Total income tax provision		531			(31	)		1,083			147
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)

Income tax expense is recognized based on the actual loss incurred during the three and nine months ended September 30, 2025 and 2024, respectively.

16. SEGMENT AND GEOGRAPHIC INFORMATION

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company's CODM is its Chief Executive Officer. The Company has determined it operates in a single operating segment and has one reportable segment, as the CODM reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geography and type for purposes of making operating decisions, allocating resources, and evaluating financial performance. The Company does not assess the performance of individual product lines on measures of profit or loss, or asset-based metrics. Therefore, the information below is presented only for revenues by geography and type.

Revenue by geographic location, which is based on the product shipped to location, is summarized as follows:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
United States	$	7,489	$	8,548	$	25,623	$	27,902
International		6,287		6,459		17,488		21,166
Total revenue	$	13,776	$	15,007	$	43,111	$	49,068

As of September 30, 2025, long-lived assets in the amount of $2,617 were located in the United States and $624 were located in foreign locations. As of December 31, 2024, long-lived assets in the amount of $5,133 were located in the United States and $776 were located in foreign locations.

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Revenue by type is a key indicator for providing management with an understanding of the Company’s financial performance, which is organized into four different categories:

1. Lease revenue – includes all system sales with typical lease terms of 36 months.

2. System revenue – includes all systems sales with payment terms within 12 months.

3. Product revenue – includes skincare, hair and other consumables payable upon receipt.

4. Service revenue – includes extended warranty sales.

The following table presents revenue by type:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Lease revenue	$	2,936	$	2,684	$	10,265	$	10,732
System revenue		7,861		8,898		23,704		28,020
Product revenue		2,332		2,741		7,196		7,945
Service revenue		647		684		1,946		2,371
Total revenue	$	13,776	$	15,007	$	43,111	$	49,068

17. RELATED PARTY TRANSACTIONS

There were no related party transactions for the three and nine months ended September 30, 2025 and 2024, respectively.

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18. SUBSEQUENT EVENTS

MSLP Consent Agreement

On October 31, 2025, the Loan Parties entered into a Consent Agreement with the Lenders (the "October 2025 MSLP Consent Agreement"). The October 2025 MSLP Consent Agreement granted relief under the 2025 Notes, such that (i) certain minimum liquidity requirements under the MSLP Loan Agreement are waived through November 30, 2025, and (ii) Venus USA is permitted to apply the November 8, 2025 cash interest payment due under each Note (as defined in the Consent Agreement) to the respective outstanding principal balance of each Note.

Twenty First Bridge Loan Amendment

On October 31, 2025, the Loan Parties entered into a Twenty First Bridge Loan Amendment Agreement with the Lenders (the “Twenty First Bridge Loan Amendment”). The Twenty First Bridge Loan Amendment amended the Bridge Loan to, among other things, (i) the maturity date of the Bridge Loan is extended from October 31, 2025 to November 30, 2025, and (ii) certain minimum liquidity requirements under Loan and Security Agreement are waived through November 30, 2025.

Thirteenth Delayed Drawdown

On October 28, 2025, the Lenders agreed to provide the Borrower with a subsequent drawdown under the Loan and Security Agreement in the principal amount of $2,000 (the “Thirteenth Delayed Drawdown”). The Thirteenth Delayed Drawdown was funded on October 28, 2025.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 that reflect our plans, estimates and beliefs and involve numerous risks and uncertainties, including but not limited to those described in in Part I, Item IA “Risk Factors” of our Annual Report on Form 10-K. Any statements contained in this Quarterly Report on Form 10-Q that are not 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,” “continue,” “guidance,” and other similar expressions that are predictions of or indicate future events and future trends.

The factors which we currently believe could have a material adverse effect on our business operations and financial performance and condition include, but are not limited to, the following risks and uncertainties:

• our dependency on our internal lease programs, which exposes us to the credit risk of our customers over the life of each subscription and/or Venus Prime agreement;

• our customers’ failure to make payments under their subscription or Venus Prime agreements;

• our customers’ ability to secure third party financing due to tightened credit markets and higher interest rates;

• our need to obtain, maintain and enforce our intellectual property rights;

• the extensive governmental regulation and oversight in the countries in which we operate and our ability to comply with the applicable requirements;

• the possibility that our systems may cause or contribute to adverse medical events that could harm our reputation, business, financial condition and results of operations;

• a significant portion of our operations are located in Israel and therefore our business, financial condition and results of operations may be adversely affected by political, economic and military conditions there;

• our ability to come into, and remain in, compliance with the listing requirements of the Nasdaq Capital Market;

• the volatility of our stock price;

• our dependency on one major contract manufacturer in Israel exposes us to supply disruptions should that facility be subject to a strike, shutdown, fire flood or other natural disaster;

• our reliance on the expertise and retention of management;

• our ability to access the capital markets and/or obtain credit on favorable terms;

• inflation, currency fluctuations and currency exchange rates;

• global supply disruptions; and

• global economic and political conditions and uncertainties, including but not limited to the Russia-Ukraine, Israel-Hamas, and Israel-Iran conflicts.

You are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these statements. The forward-looking statements are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q. 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. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Quarterly Report on Form 10-Q.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains management’s discussion and analysis of our financial condition and results of operations and should be read together with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (“Form 10-Q”), with our audited consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2024 (“Form 10-K”) and other filings we have made with the SEC.

Overview

We are an innovative global medical technology company that develops, commercializes and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related services. Our systems have been designed on cost-effective, proprietary and flexible platforms that enable us to expand beyond the aesthetic industry’s traditional markets of dermatology and plastic surgery, and into non-traditional markets, including family medicine, and general practitioners and aesthetic medical spas. In the three and nine months ended September 30, 2025 and 2024, respectively, a substantial majority of our systems delivered in North America were in non-traditional markets. As we grow our ARTAS hair restoration business and expand robotics offerings through the AI.ME™ platform we expect our penetration into the core practices of dermatology and plastic surgery to increase.

We have had recurring net operating losses and negative cash flows from operations. As of September 30, 2025 and December 31, 2024, we had an accumulated deficit of $355.5 million and $308.9 million, respectively. Until we generate revenue at a level to support our cost structure, we expect to continue to incur substantial operating losses and negative cash flows from operations. In order to continue our operations, we must achieve profitability and/or obtain additional equity investment or debt financing. Until we achieve profitability, we plan to fund our operations and capital expenditures with cash on hand, borrowings and issuances of capital stock. As of September 30, 2025 and December 31, 2024, we had cash, cash equivalents, and restricted cash of $5.9 million and $4.3 million, respectively.

The global economy, including the financial and credit markets, has recently experienced extreme volatility and disruption, including increases to inflation rates, rising interest rates, foreign currency impacts, trade disruptions due to tariff rate increases or proposed increases, declines in consumer confidence, and declines in economic growth. All these factors point to uncertainty about economic stability, and the severity and duration of these conditions on our business cannot be predicted.

On January 24, 2024, the Company announced that the Board has authorized the review of the strategic alternatives with a goal of enhancing stockholder value. There is no set timetable for the strategic review process and there can be no assurance that such review will result in any transaction or other alternative or the terms and conditions of any transaction or other alternative.

On June 5, 2025, the Company entered into the Purchase Agreement by and among the Company, Meta, and Meta Healthcare Group pursuant to which the Company agreed to sell the Venus Hair Business to Meta Healthcare Group in an all-cash transaction valued at $20 million, subject to a customary working capital adjustment. This transaction is further discussed in Note 1 "Nature of Operations" to our condensed consolidated financial statements included elsewhere in this report.

Venus Viva®, Venus Viva® MD, Venus Legacy®, Venus Concept®, Venus Versa®, Venus Fiore®, Venus Freedom™, Venus Bliss™, Venus Bliss Max™, NeoGraft®, Venus Glow™, ARTAS®, ARTAS iX®, and AI.ME™, are trademarks of the Company and its subsidiaries. Our logo and our other trade names, trademarks and service marks appearing in this document are our property. Other trade names, trademarks and service marks appearing in this document are the property of their respective owners. Solely for convenience, our trademarks and trade names referred to in this document appear without the TM or the ® symbol, but those references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights, or the rights of the applicable licensor to these trademarks and trade names.

Equity Purchase Agreement with Lincoln Park

On June 16, 2020, we entered into the Equity Purchase Agreement with Lincoln Park which provided that, upon the terms and subject to the conditions and limitations set forth therein, we may sell to Lincoln Park up to $31.0 million of shares of our common stock pursuant to our shelf registration statement. The purchase price of shares of common stock related to a future sale was based on the then prevailing market prices of such shares at the time of sales as described in the Equity Purchase Agreement. Concurrently with entering into the Equity Purchase Agreement, we also entered into the Registration Rights Agreement. During the year ended December 31, 2022, we sold to Lincoln Park 0.003 million shares of our common stock under the Equity Purchase Agreement, at which point this agreement expired. The net cash proceeds from shares issuance as of December 31, 2022 were $0.3 million. The Equity Purchase Agreement expired on July 1, 2022.

On July 12, 2022, we entered into the 2022 LPC Purchase Agreement with Lincoln Park, and we issued and sold to Lincoln Park 0.004 million shares of our common stock as a commitment fee in connection with entering into the 2022 LPC Purchase Agreement, with the total value of $0.3 million. Subsequent to execution of the 2022 LPC Purchase Agreement the Company issued approximately 39.5 thousand shares of common stock to Lincoln Park at an average price of $49.94 per share, for a total value of $1.97 million through December 31, 2022. During the twelve months ended December 31, 2023, the Company issued an additional 31.1 thousand shares of common stock to Lincoln Park at an average price of $35.53 per share, for a total value of $1.1 million. During 2024, the Company issued an additional 758 shares of common stock to Lincoln Park at an average price of $12.76 per share, for a total value of $10. The 2022 LPC Purchase Agreement expired on August 1, 2024.

The 2022 Private Placement

In November 2022, we entered into a securities purchase agreement pursuant to which we issued and sold to the 2022 Investors an aggregate of 10,608 shares of our common stock, par value $0.0001 per share, and 3,185,000 shares of our Voting Preferred Stock, which are convertible into 193,014 shares of common stock upon receipt of a valid conversion notice from a 2022 Investor or at the option of the Company within 30 days following the occurrence of certain events (the "2022 Private Placement"). The 2022 Private Placement was completed on November 18, 2022. The gross proceeds from the securities sold in the 2022 Private Placement totaled $6.7 million before offering expenses. The costs incurred with respect to the 2022 Private Placement totaled $0.2 million and were recorded as a reduction of the 2022 Private Placement proceeds in the consolidated statements of stockholders’ equity. The accounting effects of the 2022 Private Placement transaction are discussed in Note 14 "Stockholders' Equity" in the notes to our condensed consolidated financial statements included elsewhere in this report.

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The 2023 Multi-Tranche Private Placement

In May 2023, the Company entered into the 2023 Multi-Tranche Private Placement Stock Purchase Agreement with the 2023 Investors pursuant to which the Company may issue and sell to the 2023 Investors up to $9.0 million in shares of the Senior Preferred Stock in multiple tranches from time to time until December 31, 2025, subject to a minimum aggregate purchase amount of $0.5 million in each tranche. The Initial Placement occurred on May 15, 2023, under which the Company sold the 2023 Investors 280,899 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million.

On July 6, 2023, the Company and the 2023 Investors entered into the Multi-Tranche Amendment. The Multi-Tranche Amendment (a) clarifies the appropriate date pursuant to which the purchase price for each share of Senior Preferred Stock to be sold in the Private Placement is determined (such that the purchase price shall be equal to the “Minimum Price” as set forth in Nasdaq Listing Rule 5635(d)) and (b) permits the Company to specify a desired closing date (subject to approval by the 2023 Investors) for each sale in the 2023 Multi-Tranche Private Placement.

On July 12, 2023, the Company and the 2023 Investors consummated the Second Placement under the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 500,000 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million.

On September 8, 2023, the Company and the 2023 Investors consummated the Third Placement under the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 292,398 shares of Senior Preferred Stock for an aggregate purchase price of $1.0 million.

On October 20, 2023, the Company and the 2023 Investors consummated the Fourth Placement under the 2023 Multi-Tranche Private Placement, under which the Company sold the 2023 Investors 502,513 shares of Senior Preferred Stock for an aggregate purchase price of $2.0 million.

The Company used the proceeds of the Placements, after the payment of transaction expenses, for general working capital purposes. The accounting effects of the 2023 Multi-Tranche Private Placement transaction are discussed in Note 14 "Stockholders' Equity" in the notes to our condensed consolidated financial statements included elsewhere in this report.

Series X Convertible Preferred Stock

On October 4, 2023, the Company entered into the 2023 Exchange Agreement with the Madryn Noteholders, pursuant to which the Madryn Noteholders agreed to exchange $26.7 million in aggregate principal amount outstanding under the Notes for (i) $22.8 in aggregate principal amount of new secured convertible notes of the Company and (ii) 248,755 shares of newly-created convertible preferred stock of the Company, par value $0.0001 per share designated as "Series X Convertible Preferred Stock." The transaction is discussed in Note 14 "Stockholders' Equity" in the notes to our condensed consolidated financial statements included elsewhere in this report.

Registered Direct Offerings

On February 22, 2024, the Company, entered into the SPA with the 2024 Investors, pursuant to which the Company agreed to issue and sell to the 2024 Investors (i) in a registered direct offering, an aggregate of 74,342 shares of the Company’s common stock, at a price of $16.115 per share and (ii) in a concurrent private placement, the 2024 Investor Warrants at an initial exercise price of $14.74 per share.

On April 9, 2025, the Company entered into a SPA with the April 9 Investors pursuant to which the Company agreed to issue and sell to the April 9 Investors in a registered direct offering an aggregate of 328,573 shares of the Company’s common stock, at a price of $3.50 per share.

On April 11, 2025, the Company entered into a securities purchase agreement with the April 11 Investors pursuant to which the Company agreed to issue and sell to the April 11 Investors in a registered direct offering an aggregate of 386,700 shares of the Company's common stock, at a price of $4.06 per share.

HCW acted as the Company’s placement agent in connection with the April 9 Offering and the April 11 Offerings. For each offering, the Company paid HCW consideration consisting of (i) a cash fee equal to 7.0% of the gross proceeds in the respective offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds in the respective offering, (iii) reimbursement of certain expenses and (iv) April 2025 Placement Agent Warrants to acquire up to an aggregate of (i) 23,000 shares of common stock in the April 9 Offering and (ii) 27,069 shares of common stock in the April 11 Offering. The April 2025 Placement Agent Warrants have an initial exercise price of $4.375 per share for the April 9 Offering and $5.075 per share for the April 11 Offering.

On June 6, 2025, the Company, entered into a SPA with certain institutional investors, pursuant to which the Company agreed to issue and sell to the June 6 Investors (i) in a registered direct offering, an aggregate of 434,720 shares of the Company’s common stock, par value $0.0001 per share, at a price of $2.65 per share and (ii) in a concurrent private placement, the 2025 Investor Warrants, at an initial exercise price of $2.65 per share. HCW acted as the Company’s placement agent in connection with Offering. The Company paid HCW consideration consisting of (i) a cash fee equal to 7.0% of the aggregate gross proceeds in the Offering, (ii) a management fee equal to 1.0% of the aggregate gross proceeds in the June 6 Offering, (iii) reimbursement of certain expenses and (iv) June 6 Placement Agent Warrants to acquire up to an aggregate of 30,430 shares of Common Stock. The June 6 Placement Agent Warrants are substantially similar to the 2025 Investor Warrants, except that the initial exercise price of the June 6 Placement Agent Warrants is $3.3125 per share.

The offerings transactions are discussed in Note 14 "Stockholders' Equity" in the notes to our condensed consolidated financial statements included elsewhere in this report.

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Madryn Loan and Security Agreement

On April 23, 2024, the Company entered into the Loan and Security Agreement, by and among the Bridge Borrower, the 2024 Guarantors, the 2024 Lenders and Madryn Health Partners, LP, as administrative agent. Pursuant to the Loan and Security Agreement, the 2024 Lenders have agreed to provide the Bridge Borrower with Bridge Financing in the form of a term loan in the original principal amount of $2.2 million and one or more delayed draw term loans of up to an additional principal amount of $2.8 million.

On July 26, 2024 September 11, 2024, and November 1, 2024 additional delayed draws in the amounts of $1.0 million were made, respectively. On November 26, 2024, an additional delayed draw of $1.2 million was made, and on December 9, 2024, an additional delayed draw of $1.5 million was made, for a total drawdown as of December 31, 2024 of $7.9 million. From January 27, 2025 to September 30, 2025, an aggregate of $15.3 million in additional delayed draws were funded.

From May 24, 2024 through September 30, 2025 the Loan Parties entered into Bridge Financing Amendments Two through Twenty, which among other things, extended the maturity date to October 31, 2025, increased the delayed draw commitment from $2.8 million to $26.0 million, made interest payments payable-in-kind, deleted the net loss covenant, and granted relief from minimum liquidity requirements. These amendments are discussed in Note 11 "Madryn Debt and Convertible Notes" in the notes to our condensed consolidated financial statements included elsewhere in this report.

2024 Exchange Agreements, 2025 Exchange Agreements and Series Y Convertible Preferred Stock Issuance

On May 24, 2024, the Company entered into the 2024 Exchange Agreement with the Madryn Noteholders, pursuant to which the Madryn Noteholders agreed to exchange $52,142 in aggregate principal amount outstanding under the Main Street Priority Loan, dated December 8, 2020, for (i) $17,142 in aggregate principal amount of new secured convertible notes of the Company and (ii) 576,986 shares of Series Y Preferred Stock. As part of the extinguishment of principal, the Company recognized a $10.9 million non-cash loss.

On September 26, 2024, the Company entered into the Second 2024 Exchange Agreement whereby the Company exchanged $17,662 of the balance outstanding under the MSLP Loan Agreement for $2,662 in aggregate principal amount outstanding under the MSLP Loan Agreement and 203,583 shares of Series Y Preferred Stock. As part of the extinguishment of principal, the Company recognized a $0.5 million non-cash loss.

On March 31, 2025, the Company entered into the 2025 Exchange Agreement whereby the Company exchanged $28,016 in aggregate principal amount outstanding under the New Notes for $17,016 in aggregate principal of New Secured Notes and 379,311 shares of Series Y Preferred Stock. As part of the extinguishment of principal, the Company recognized a $1.0 million non-cash loss.

On June 30, 2025, the Company entered into the June 2025 Exchange Agreement with the Madryn Noteholders. Pursuant to the June 2025 Exchange Agreement, the Madryn Noteholders agreed to exchange $17,016 in aggregate principal amount of outstanding secured convertible notes of the Company for: (a) the New Madryn Note, and (b) 325,651 shares of the Company’s convertible preferred stock, par value $0.0001 per share, designated as Series Y Preferred Stock. The Series Y Preferred Stock is priced at $19.96 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding date of the June 2025 Exchange Agreement, multiplied by (ii) 9.0909. The New Secured Notes follow the same terms as the existing New Notes. As part of the extinguishment of principal, the Company recognized a $1.9 million non-cash loss.

On September 30, 2025, the Company entered into the September 2025 Exchange Agreement with Madryn Noteholders. Pursuant to the September 2025 Exchange Agreement, the Madryn Noteholders agreed to exchange $11,479 in aggregate principal and accrued interest amount of outstanding secured convertible notes of the Company for 545,335 shares of the Company’s convertible preferred stock, par value $0.0001 per share, designated as Series Y Preferred Stock. The Series Y Preferred Stock is priced at $21.05 per share, being equal to the product of (i) the average closing price (as reflected on Nasdaq.com) of the Company's common stock for the five trading days immediately preceding the date of the September 2025 Exchange Agreement, multiplied by (ii) 9.0909. Following the September 2025 Exchange Agreement there was no principal or interest remaining on the New Secured Notes. As part of the debt extinguishment, the Company recognized an $11,297 non-cash loss.

The transactions are discussed in Note 11 “Madryn Debt and Convertible Notes” and Note 14 "Stockholders' Equity" in the notes to our condensed consolidated financial statements included elsewhere in this report.

Products and Services

We derive revenue from the sale of products and services. Product revenue includes revenue from the following:

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the sale, including traditional sales, Venus Prime and legacy subscription-based sales, of systems, inclusive of the main console and applicators/handpieces (referred to as system revenue);

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marketing supplies and kits;

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consumables and disposables;

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service revenue; and

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replacement applicators/handpieces.

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Service revenue includes revenue derived from our extended warranty service contracts provided to our existing customers.

Systems are sold through traditional sales contracts, through our internal financing programs and through distributors. In the third quarter of 2022 we commenced an initiative to reduce our reliance on system sales sold under subscription agreements in the United States. This strategic shift is designed to improve cash generation and reduce our exposure to defaults and increased bad debt expense given the increasingly challenging economic environment caused by the coexistence of high inflation and high interest rates.

We generate revenue from traditional system sales and from sales under our internal lease programs, which are available to customers in North America and select international markets. Approximately 30% and 28% of our aesthetic system revenues were derived from our internal lease programs in the nine months ended September 30, 2025 and September 30, 2024, respectively. We currently do not offer the ARTAS iX system under our internal lease programs. For additional details related to our internal lease programs, see Part 1, Item 1. Business as filed in our Form 10-K for the year ended December 31, 2024.

In January 2024, the Company launched its new Venus Prime program which is a structured in-house financing program replacing its legacy subscription program for customers in North America. Under our Venus Prime program, select customers can qualify for competitive financing rates and continue to benefit from the payment flexibility afforded by our previous subscription financing program when purchasing our aesthetic medical devices, as well as a seamless technology upgrade program made available to our customers in years 2 and 3 of ownership.

Like our legacy subscription model, Venus Prime includes an up-front fee and a monthly payment schedule, typically over a period of 36 months, with approximately 40% to 45% of total contract payments collected in the first year. To ensure that each monthly payment is made on time and that the customer’s system is serviced in accordance with the terms of the warranty, every product purchased under Venus Prime requires a monthly activation code, which we provide to the customer upon receipt of the monthly payment. These recurring monthly payments provide our customers with enhanced financial transparency and predictability. This structure can provide greater flexibility than traditional equipment leases secured through financing companies. We work closely with our customers to provide business recommendations that improve the quality-of-service outcomes, build patient traffic and improve financial returns for the customer’s business.

We have developed and received regulatory clearance for twelve novel aesthetic technology platforms, including our ARTAS and NeoGraft systems. We believe our ARTAS and NeoGraft systems are complementary and give us a hair restoration product offering that can serve a broad segment of the market. Our medical aesthetic technology platforms have received regulatory clearance for a variety of indications, including treatment of facial wrinkles in certain skin types, temporary reduction of appearance of cellulite, non-invasive fat reduction (lipolysis) in the abdomen and flanks for certain body types and relief of minor muscle aches and pains in jurisdictions around the world. In addition, our technology pipeline is heavily focused on improving and enhancing our current technologies, products, and services and the development of robotically assisted minimally invasive solutions for aesthetic procedures that are primarily treated by surgical intervention, including the AI.ME platform for which we received FDA 510(k) clearance for fractional skin resurfacing in December 2022.

In the United States, we have obtained 510(k) clearance from the FDA for our Venus Viva, Venus Viva MD, Venus Legacy, Venus Versa, Venus Versa Pro, Venus Velocity, Venus Bliss, Venus Bliss Max, Venus Epileve, Venus Fiore, ARTAS, ARTAS iX and AI.ME systems. Outside the United States, we market our technologies in over 60 countries across Europe, the Middle East, Africa, Asia-Pacific and Latin America. Because each country has its own regulatory scheme and clearance process, not every device is cleared or authorized for the same indications in each market in which a particular system is marketed.

As of September 30, 2025, we operated directly in 11 international markets through our 9 direct offices in the United States, Canada, Mexico, Spain, Germany, Australia, China, Hong Kong, and Israel.

Our revenues for the three months ended September 30, 2025 and 2024 were $13.8 million and $15.0 million, respectively. Our revenues for the nine months ended September 30, 2025 and 2024 were $43.1 and $49.1 million, respectively. We had a net loss attributable to the Company of $22.6 million and $9.3 million in the three months ended September 30, 2025 and 2024, respectively. We had a net loss attributable to the Company of $46.7 and $39.0 million in the nine months ended September 30, 2025 and 2024, respectively. We had an Adjusted EBITDA loss of $7.8 million and $5.9 million for the three months ended September 30, 2025, and 2024, respectively. We had an Adjusted EBITDA loss of $25.0 and $15.1 million for the nine months ended September 30, 2025 and 2024, respectively.

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Use of Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP measure defined as net income (loss) before foreign exchange (gain) loss, financial expenses, income tax expense (benefit), depreciation and amortization, stock-based compensation and non-recurring items for a given period. Adjusted EBITDA is not a measure of our financial performance under U.S. GAAP and should not be considered an alternative to net income or any other performance measures derived in accordance with U.S. GAAP. Accordingly, you should consider Adjusted EBITDA along with other financial performance measures, including net income, and our financial results presented in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate Adjusted EBITDA differently or not at all, which reduces its usefulness as a comparative measure. We understand that although Adjusted EBITDA is frequently used by securities analysts, lenders and others in their evaluation of companies, Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are: Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and although depreciation and amortization are non-cash charges, the assets being depreciated will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements.

We believe that Adjusted EBITDA is a useful measure for analyzing the performance of our core business because it facilitates operating performance comparisons from period to period and company to company by backing out potential differences caused by changes in foreign exchange rates that impact financial assets and liabilities denominated in currencies other than the U.S. dollar, tax positions (such as the impact on periods or companies of changes in effective tax rates), the age and book depreciation of fixed assets (affecting relative depreciation expense), amortization of intangible assets, stock-based compensation expense (because it is a non-cash expense) and non-recurring items as explained below.

The following is a reconciliation of net loss to Adjusted EBITDA for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Reconciliation of net loss to adjusted EBITDA	(in thousands)						(in thousands)
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)
Foreign exchange (gain) loss		(35	)		57			(699	)		1,155
Loss on disposal of subsidiaries		244			—			244			—
Loss on debt extinguishment		11,297			454			14,211			11,355
Finance expenses		1,016			1,665			3,753			5,785
Income tax (benefit) expense		531			(31	)		1,083			147
Depreciation and amortization		977			971			2,881			2,924
Stock-based compensation expense		135			239			479			817
ERC Claim recovery (4)		63			—			(1,442	)		—
Top up to 401(k) under the Voluntary Correction Plan (3)		—			—			516			—
CEWS (1)		—			—			—			418
Other adjustments (2)		498			73			618			1,220
Adjusted EBITDA	$	(7,823	)	$	(5,874	)	$	(25,013	)	$	(15,134	)

(1) In April 2022, the Canada Revenue Agency (“CRA”) initiated an audit of the Canada Emergency Wage Subsidy Claim (“CEWS”) that the Company filed between 2020-2021. The CRA has currently assessed a denial of CEWS claims made by the Company in 2020 and is requesting repayment of $418. The Company disputes the CRA assessment and intends to challenge this matter through the Tax Court or Judicial Review.

(2) For the three and nine months ended September 30, 2025, the other adjustments are represented by legal and other professional fees incurred to support the sale of the Venus Hair Business. For the three and nine months ended September 30, 2024, the other adjustments are represented by restructuring activities designed to improve the Company's operations and cost structure.

(3) A provision has been made under the Voluntary Correction Plan to account for a discrepancy noted by the IRS upon review of the Company’s 401(K) plan.

(4) Represents funds received or accrued under the IRS Employee Retention Tax Credit (ERC) program providing relief to eligible businesses impacted by the COVID-19 pandemic.

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Key Factors Impacting Our Results of Operations

Our results of operations are impacted by several factors, but we consider the following to be particularly significant to our business:

Number of systems delivered. The majority of our revenue is generated from the delivery of systems, both under traditional sales contracts and internal financing programs. The following table sets forth the number of systems we have delivered in the geographic regions indicated:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
United States		77		88		264		317
International		121		165		366		472
Total systems delivered		198		253		630		789

Mix between traditional sales, distributor sales, and sales made under our internal financing programs. We deliver systems through (1) traditional direct system sales contracts to customers, (2) our internal financing programs, and (3) system sales through distribution agreements. Unit deliveries under direct system sales contracts and internally financed sales have higher per unit revenues and gross margins, while revenues and gross margins on systems sold through distributors are lower. However, distributor sales do not require significant sales and marketing support as these expenses are borne by the distributors. In addition, while traditional system sales and internally financed sales have similar gross margins, cash collections on sales financed under our internal financing programs generally occur over a three-year period, with approximately 40% to 45% collected in the first year and the balance collected evenly over the remaining two years of the agreement. In the third quarter of 2022 we commenced an initiative to reduce our reliance on system sales sold under our internal financing programs in the United States. This strategic shift is designed to improve cash generation and reduce our exposure to defaults and increased bad debt expense given the increasingly challenging economic environment caused by the coexistence of high inflation and high interest rates.

Investment in Sales, Marketing and Operations. In previous years, we made a strategic decision to penetrate the global market by investing in sales and marketing expenses across all geographic segments. This included the opening of direct offices and hiring experienced sales, marketing, and operational staff. While we generated incremental product sales in these new markets, these revenues and the related margins did not fully offset the startup investments made in certain countries. We continue to evaluate our profitability and growth prospects in these countries and have taken and will continue to take steps to exit countries which we do not believe will produce sustainable results. Since June 2020 we have ceased direct sales operations in 14 countries across Europe, Asia Pacific, Latin America and Africa and have increased our investment in, and focus on, the United States market.

In the three and nine months ended September 30, 2025, and 2024, respectively, we did not open any direct sales offices.

Bad Debt Expense. We maintain an allowance for expected credit losses for estimated losses that may primarily arise from customers who purchased our products under our internal financing programs who are unable to make the remaining payments required under their agreements. We continue to focus our selling efforts on cash sales and internal financing customers with a stronger credit profile, with the goal of reducing our exposure to credit losses. We incurred a bad debt expense of $0.3 million and $2.6 million during the three and nine months ended September 30, 2025. This compares to $0.4 million and $0.9 million for the three and nine months ended September 30, 2024. As of September 30, 2025, our allowance for expected credit losses was $2.1 million which represented approximately 7.4% of the gross outstanding accounts receivable as of this date. As of September 30, 2024 our allowance for expected credit losses was $4.1 million which represented 16.4% of the gross outstanding accounts receivable as of this date.

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Outlook

The global economy, including the financial and credit markets, has recently experienced extreme volatility and disruption due to persistent inflation, high interest rates, foreign currency impacts, declines in consumer confidence, and a challenging growth environment. In addition, we face uncertainty with respect to both the quantum and duration of tariffs the new U.S. Federal administration will levy on goods imported from Israel, China, Mexico, Europe, Canada and other international jurisdictions. These actions have prompted retaliatory tariffs and other measures by a number of countries. The U.S. Federal administration recently increased tariffs on goods imported from Israel to 15% (reduced from an initial increase of 17%) as of August 7, 2025. As the majority of our systems are sourced from Israel, our cost of goods will increase and we will experience modest margin erosion. All these factors point to potential recessionary impacts, and the severity and duration of these conditions on our business cannot be predicted. The bulk of the first half revenue decline was due to a significant tightening in credit markets in the U.S. and international markets due to higher interest rates and economic uncertainty impacting our customers' ability and/or desire to secure capital equipment financing. In addition, our international results were negatively affected by our international strategy to wind down underperforming countries as we continued to transition to third party distributors. To a lesser extent, the revenue declines were also impacted by supply disruptions caused by the Israel-Iran conflict impacting production at our contract manufacturer’s facility in Israel. On a positive note, the Federal Reserve Board (Fed), the Bank of England, the European Central Bank, the Swiss National Bank and the Bank of Canada all recently reduced interest rates in an effort to reduce the degree of restrictiveness in monetary policy. We remain focused on adapting to the challenges presented by the current macro-economic environment, as well as the opportunities presented by an easing of monetary policy.

Israel – Hamas conflict. Following the October 7, 2023 attack by Hamas on Israeli citizens and the declaration of war that followed, we took steps to mitigate exposure to risks related to our Israeli operations, the risks of which are further described in Item 1A. Risk Factors in this Quarterly Report on Form 10-Q. These efforts included but were not limited to, working with our contract manufacturers to accelerate inventory build, contingency planning with respect to alternative manufacturing sites within their network, and relocating larger amounts of finished goods to warehouses in North America to protect our ability to distribute products. Alongside the Company's continuity plan, we continue to maintain regular contact with our employees in Israel and previously instituted a wellness program designed to provide access to healthcare practitioners/consultants for short term counselling for colleagues and family members in order to provide assistance during the conflict. While the announcement of a ceasefire on October 10, 2025 is expected to reduce risks to our Israeli operations, Venus continues to evaluate risk mitigation steps moving forward.

Israel-Iran Conflict. On June 13, 2025, Israel launched a preemptive attack on Iran, to which Iran responded with ballistic missile and drone attacks. On June 23, 2025, Israel and Iran agreed to a ceasefire, although there is no assurance that the ceasefire will continue. How long and how severe the current conflict may become is unknown at this time, and any continued clash among Israel and Iran or other countries or militant groups in the region may escalate in the future into a greater regional conflict. The Company continues to monitor political and military developments closely and examine the consequences for its operations and assets.

Supply chain. We did experience some supply issues during the three and nine months ended September 30, 2025 primarily tracing to shipment delays and disruptions resulting from the Israe-Hamas and Israel-Iran conflicts impacting our contract manufacturer in Israel. We continue to actively work with our suppliers and third-party manufacturers to mitigate supply issues and build inventory of key component parts. We anticipate some supply challenges during the balance of 2025, due to geopolitical disruption in the middle east impacting shipping lanes, deliveries of materials and component parts, impacting production lead times that may impact our ability to manufacture the number of systems required to meet customer demand. In addition, since the second quarter of 2021 we have experienced significant inflationary pressures throughout our supply chain, which may continue throughout the rest of 2025. We also face uncertainty with respect to the quantum and duration of tariffs the new U.S. Federal administration will levy on goods imported from China, Mexico, Europe, Canada and other international jurisdictions. These actions have prompted retaliatory tariffs and other measures by a number of countries. The U.S. Federal administration recently increased tariffs on goods imported from Israel to 15% (reduced from initial increase of 17%). As the majority of our systems are sourced from Israel, our cost of goods will increase and we will experience modest margin erosion. We continue to mitigate such pressures, where possible, through price increases and margin management.

Global economic conditions. General global economic downturns and macroeconomic trends, including heightened inflation, capital markets volatility, interest rate and currency rate fluctuations, protectionist trade policies and retaliatory measures, economic slowdowns, have resulted and may continue to result in unfavorable conditions and recessionary impacts that negatively affect demand for our products and exacerbate some of the other risks that affect our business, financial condition and results of operations. Both domestic and international markets experienced significant inflationary pressures in fiscal year 2024. While inflation rates in the U.S., as well as in other countries in which we operate, were showing signs of moderation, protectionist trade policies in 2025 are fueling inflation, affecting governments, consumers, corporations and small businesses alike. Our customers have also been affected by higher inflation and higher interest rates, impacting their ability to secure third party financing or causing many of them to delay capital purchases due to high interest rates. As noted above, the Federal Reserve in the U.S. and other central banks in various countries have commenced a cycle of interest rate reductions in response to concerns about stagnant growth, and protectionist trade policies.

Sales markets. We are a global business, having established a commercial presence in more than 60 countries during our history. While the continued post-pandemic recovery remains challenging due to the challenging global economic conditions noted above, we continue to evaluate our direct operations, particularly those outside of North America.

Accounts receivable collections. We remain fully focused on our revised credit screening practices with the goal of reducing bad debt expenses. As of September 30, 2025, our allowance for expected credit losses stands at $2.1 million, which represents 7% of the gross outstanding accounts receivable as of that date. This represents a decrease of $1.7 million or 45% from our December 31, 2024 allowance for expected credit losses balance of $3.8 million.

Foreign Exchange fluctuations. We are primarily exposed to foreign exchange risk with respect to revenues generated outside of the United States denominated in New Israeli Shekels, Euros, Canadian dollars, Australian dollars, Hong Kong dollars, and Mexican pesos. We manage our foreign currency exposures on a consolidated basis, which allows us to net exposures and take advantage of any natural offsets. We do not hedge our entire foreign exchange exposure and are still subject to earnings and stockholders' equity volatility relating to foreign exchange risk. Financial market and currency volatility may limit our ability to cost-effectively hedge these exposures.

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Basis of Presentation

Revenues

We generate revenue from (1) sales of systems through our internal financing programs, traditional system sales to customers and distributors, (2) other product revenues from the sale of ARTAS kits, Viva tips, other consumables, marketing supplies, and (3) service revenue from our extended warranty service contracts provided to existing customers.

System Revenue

For the three and nine months ended September 30, 2025, approximately 27% and 30%, respectively, of our total system revenues were derived from our internal financing programs (Venus Prime and our legacy subscription model). For the three and nine months ended September 30, 2024, approximately 23% and 28% of our total system revenues were derived from our internal financing programs. Our internal financing program revenues are in line with our strategy to limit our internal financing program to a range of 25% to 30% of total system revenues. In so doing, we prioritize cash deals over internal financing program deals in order to improve cash generation and preserve liquidity. Our internal financing programs are designed to provide a low barrier to ownership of our systems and includes an up-front fee followed by monthly payments, typically over a 36-month period. The up-front fee serves as a down payment. For accounting purposes, our internal financing programs are considered to be sales-type finance leases, where the present value of all cash flows to be received under the agreement is recognized as revenue upon shipment to the customer and achievement of the required revenue recognition criteria.

For the three and nine months ended September 30, 2025 approximately 62% and 62%, respectively, of our total system revenues were derived from traditional sales. For the three and nine months ended September 30, 2024, approximately 61% and 59%, respectively, of our total system revenues were derived from traditional sales. We continue to focus on traditional sales in line with our strategy to prioritize cash deals over internal lease program deals in order to improve cash generation and preserve liquidity.

Customers generally demand higher discounts in connection with traditional sales. We recognize revenues from products sold to customers based on the following five steps: (1) identification of the contract(s) with the customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the separate performance obligations in the contract; and (5) recognition of revenue when (or as) the entity satisfies a performance obligation.

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We do not grant rights of return or early termination rights to our customers under either our traditional sales or internal lease programs. These traditional sales are generally made through our sales team in the countries in which the team operates.

For the three and nine months ended September 30, 2025, approximately 11% and 8%, respectively, of our total system revenues were derived from distributor sales. For the three and nine months ended September 30, 2024, approximately 16% and 13%, respectively, of our total system revenues were derived from distributor sales. The decline is attributable to uncertainty about economic stability, a significant tightening in international credit markets, and supply chain disruptions due to the Israel-Iran conflict. Under the traditional distributor relationship, we do not sell directly to the end customer and, accordingly, achieve a lower overall margin on each system sold compared to our direct sales. These sales are non-refundable, non-returnable and without any rights of price protection or stock rotation. Accordingly, we consider distributors as end customers, and are accounted for using the sell-in method.

Procedure Based Revenue

We generate revenue from the harvesting, site making, and implantation procedures performed with our ARTAS system. The harvesting procedure, as the name suggests, is the act of harvesting hair follicles from the patient’s scalp for implantation in the prescribed areas. To perform these procedures, a disposable clinical kit is required. These kits can be large (with an unlimited number of harvests) or small (with a maximum of 1,100 harvests). The customer must place an online order with us for the number and type of kits desired and make a payment. Upon receipt of the order and the related payment, we ship the kit(s), and the customer must scan the barcode on the kit label in order to perform the procedure. Once the kits are exhausted, the customer must purchase additional kits. The site making procedure uses the ARTAS system to create a recipient site (i.e., site making) in the patient’s scalp affected by androgenic alopecia (or male pattern baldness). The site making procedure also requires a disposable site making kit. The site making kits are sold to customers in the same manner as the kits for harvesting procedures. The implantation procedure utilizes the same disposal kit that is used for site making and involves immediately implanting follicles into the created recipient site. The implantation kits are sold to customers in the same manner as the harvesting and site making kits.

Other Product Revenue

We also generate revenue from our customer base by selling Viva tips, Glide (a cooling/conductive gel which is required for use with many of our systems), marketing supplies and kits, various consumables and disposables, replacement applicators and handpieces, and ARTAS system training.

Service Revenue

We generate ancillary revenue from our existing customers by selling additional services including extended warranty service contracts.

Cost of Goods Sold and Gross Profit

Cost of goods sold consists primarily of costs associated with manufacturing our different systems, including direct product costs from third-party manufacturers, warehousing and storage costs and fulfillment and supply chain costs inclusive of personnel-related costs (primarily salaries, benefits, incentive compensation and stock-based compensation). Cost of goods sold also includes the cost of upgrades, technology amortization, royalty fees, parts, supplies, and cost of product warranties.

Operating Expenses

Selling and Marketing

We currently sell our products and services using direct sales representatives in North America and in select international markets. Our sales costs primarily consist of salaries, commissions, benefits, incentive compensation and stock-based compensation. Costs also include expenses for travel and other promotional and sales-related activities as well as clinical training costs.

Our marketing costs primarily consist of salaries, benefits, incentive compensation and stock-based compensation. They also include expenses for travel, trade shows, and other promotional and marketing activities, including direct and online marketing. As the business environment improves, we expect sales and marketing expenses to continue to increase, but at a rate slightly below our rate of revenue growth.

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General and Administrative

Our general and administrative costs primarily consist of expenses associated with our executive, accounting and finance, information technology, legal, regulatory affairs, quality assurance and human resource departments, direct office rent/facilities costs, and intellectual property portfolio management. These expenses consist of personnel-related expenses (primarily salaries, benefits, incentive compensation and stock-based compensation), audit fees, legal fees, consultants, travel, insurance, and expected credit losses. During the normal course of operations, we may incur expected credit losses on accounts receivable balances that are deemed to be uncollectible.

Research and Development

Our research and development costs primarily consist of personnel-related costs (primarily salaries, benefits, incentive compensation, and stock-based compensation), material costs, amortization of intangible assets, clinical costs, and facilities costs in our Yokneam, Israel and San Jose, California research centers. Our ongoing research and development activities are primarily focused on improving and enhancing our current technologies, products, and services, and on expanding our current product offering with the introduction of new products and expanded indications.

We expense all research and development costs in the periods in which they are incurred. We expect our research and development expenses to increase in absolute dollars as we continue to invest in research, clinical studies, and development activities, but to decline as a percentage of revenue as our revenue increases over time.

Finance Expenses

Finance expenses consist of interest income, interest expense and other banking charges. Interest income primarily consists of interest earned on our cash, cash equivalents and short-term bank deposits. We expect interest income to vary depending on our average investment balances and market interest rates during each reporting period. Interest expense primarily consists of interest on long-term debt and other borrowings. The interest rates on our long-term debt were 7.4% for the MSLP Loan (now owned by Madryn), 13.5% for the Madryn Notes, and 13.6% for the 2024 Notes as of September 30, 2025 and 7.7% for the MSLP Loan, 13.5% for the Madryn Notes, and 13.6% for the 2024 Notes as of December 31, 2024 .

Foreign Exchange (Gain) Loss

Foreign currency exchange loss changes reflect foreign exchange gains or losses related to the change in value of assets and liabilities denominated in currencies other than the U.S. dollar.

Loss on Debt Extinguishment

Loss on Debt Extinguishment is due to three exchanges: a) the March 2025 exchange of $28.0 million in aggregate principal and interest amount outstanding under the New Notes for $17.0 million in aggregate principal of the New Secured Notes and 379,311 shares of its Series Y Preferred Stock. As a result of the March 2025 extinguishment, the Company recognized a $1.0 million non-cash loss; b) the June 2025 exchange of $17.0 million in aggregate principal and interest amount outstanding under the New Secured Notes for $11.1 million in aggregate principal of the New Madryn Note and 325,651 shares of its Series Y Preferred Stock. As a result of the June 2025 extinguishment, the Company recognized a $1.9 million non-cash loss; and c) the September 2025 exchange of $11.5 million in aggregate principal and interest amount outstanding in convertible notes of the Company, for 545,335 shares of its Series Y Preferred Stock. As a result of the September 2025 extinguishment, the Company recognized an $11.3 million non-cash loss.

Income Tax Expense

We estimate our current and deferred tax liabilities based on current tax laws in the statutory jurisdictions in which we operate. These estimates include judgments about liabilities resulting from temporary differences between assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. In certain jurisdictions, only the payments invoiced in the current period are subject to tax, but for accounting purposes, the discounted value of the total subscription contract is reported and tax affected. This results in a deferred tax credit which is settled in the future period when the monthly installment payment is issued and settled with the customer. Since our inception, we have not recorded any tax benefits for the net operating losses we have incurred in each year or for the research and development tax credits we generated in the United States. We believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized. Income tax expense is recognized based on the actual taxable income or loss incurred during the three and nine months ended September 30, 2025.

Non-Controlling Interests

We have minority shareholders in one jurisdiction in which we have direct operations. For accounting purposes, these minority partners are referred to as non-controlling interests, and we record the non-controlling interests’ share of earnings in our subsidiaries as a separate balance within stockholders’ equity in the consolidated balance sheets and consolidated statements of stockholders’ equity (deficit).

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Results of Operations

The following tables set forth our consolidated results of operations in U.S. dollars and as a percentage of revenues for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Consolidated Statements of Loss:	*(dollars in thousands)*						*(dollars in thousands)*
Revenues:
Leases	$	2,935		$	2,684		$	10,265		$	10,732
Products and services		10,841			12,323			32,846			38,336
Total revenue		13,776			15,007			43,111			49,068
Cost of goods sold:
Leases		906			651			3,019			2,538
Products and services		4,053			4,435			13,089			13,113
		4,959			5,086			16,108			15,651
Gross profit		8,817			9,921			27,003			33,417
Operating expenses:
Selling and marketing		7,386			6,654			22,063			21,076
General and administrative		9,647			8,732			28,815			27,640
Research and development		1,280			1,692			4,190			5,214
Total operating expenses		18,313			17,078			55,068			53,930
Loss from operations		(9,496	)		(7,157	)		(28,065	)		(20,513	)
Other expenses:
Foreign exchange (gain) loss		(35	)		57			(699	)		1,155
Finance expenses		1,016			1,665			3,753			5,785
Loss on disposal of subsidiaries		244			—			244			—
Loss on debt extinguishment		11,297			454			14,211			11,355
Loss before income taxes		(22,018	)		(9,333	)		(45,574	)		(38,808	)
Income tax (benefit) expense		531			(31	)		1,083			147
Net loss	$	(22,549	)	$	(9,302	)	$	(46,657	)	$	(38,955	)
Net loss attributable to stockholders of the Company		(22,565	)		(9,286	)		(46,649	)		(39,031	)
Net (loss) income attributable to non-controlling interest		16			(16	)		(8	)		76
As a % of revenue:
Revenues		100	%		100	%		100	%		100	%

Venus Concept Inc. 10-Q