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CUSIP NO. 92332W105
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13D
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Page 7 of 10 Pages
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ITEM 3.
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SOURCE AND AMOUNT OF FUNDS
OR OTHER CONSIDERATION.
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On October 11, 2016, Venus Concept Ltd., a
predecessor of the Company, entered into a credit agreement as a guarantor with Health Partners, LP, as administrative agent, and the Funds as lenders (as amended, restated supplemented or modified, the Credit Agreement), pursuant
to which the Funds agreed to make certain loans to certain of Venus Concept Ltd.s subsidiaries. On November 7, 2019, in connection with the merger between Restoration Robotics, Inc. and Venus Concept Ltd. (the Merger), the
Company joined the Credit Agreement as a guarantor.
Prior to the Merger, the Reporting Persons acquired beneficial ownership in a series
of financing transactions of certain equity and equity-linked securities of Venus Concept Ltd which, upon consummation of the Merger, automatically converted into equity securities of the Company. All of the Common Stock held directly by the Funds
were acquired from the Company, or its predecessor Venus Concept Ltd., by or on behalf of the Funds using the investment capital of the Funds. The aggregate purchase price of the Common Stock held directly by the Funds was approximately $15,475,268
(excluding brokerage commissions and transaction costs).
In connection with the Credit Agreement, Venus Concept Ltd. issued three types
of 10-year warrants (collectively, the Warrants). Immediately prior to the consummation of the Merger, the Funds held Warrants to purchase 150,000 ordinary shares of Venus Concept Ltd. at a
price of $5.0604 per share, 150,000 Series B Preferred Shares of Venus Concept Ltd. at a price of $5.0604 per share, and 12,000 Series C Preferred Shares of Venus Concept Ltd. at a price of $5.0604 per share. At the effective time of the
Merger, each outstanding Warrants, whether or not vested, to purchase ordinary shares or preferred shares, as applicable, of Venus Concept Ltd., that was unexercised immediately prior to the effective time of the Merger was converted into a warrant
to purchase shares of Common Stock at an exchange ratio of one ordinary share of preferred share of Venus Concept Ltd to 8.6506 shares of Common Stock. As of the date hereof, the Warrants are exercisable into 179,932 shares of Common Stock at an
exercise price of $8.775 per share, at any time on or prior to its expiration on December 1, 2026.
On December 9, 2020, the
Funds acquired $26,695,110.54 aggregate principal amount of the Companys the secured subordinated convertible notes (the Convertible Notes) pursuant to a Securities Exchange and Registration Rights Agreement (the
Exchange Agreement), dated as of December 8, 2020, pursuant to which the Company repaid $42,500,000 aggregate principal amount owed under the Credit Agreement and issued the Convertible Notes to the Funds. The initial
conversion rate is 307.6923077 shares of Common Stock per $1,000 principal amount of Convertible Notes, which represents an initial conversion price of approximately $3.25 per share of common stock. The conversion rate will be subject to customary
adjustments upon the occurrence of certain events.
ITEM 4.
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PURPOSE OF THE TRANSACTION.
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The information set forth in Items 3 and 6 of this Statement is hereby incorporated by reference into this Item 4.
The Reporting Persons acquired the securities reported herein for investment purposes and intend to review their investments in the
Company on a continuing basis. Depending on various factors, including but not limited to the Companys financial position and strategic direction, price levels of the Common Stock, conditions in the securities markets, various laws and
regulations applicable to the Company and companies in its industry and the Reporting Persons ownership in the Company, and general economic and industry conditions, the Reporting Persons may in the future take actions with respect to their
investment in the Company as they deem appropriate, including changing their current intentions, with respect to any or all matters required to be disclosed in this Statement. Without limiting the foregoing, the Reporting Persons may, from time to
time, acquire or cause affiliates to acquire additional shares of Common Stock or other securities of the Company (including any combination or derivative thereof), dispose, or cause affiliates to dispose, of some or all of their Common Stock or
other securities of the Company or continue to hold, or cause affiliates to hold, Common Stock or other securities of the Company.