# EDGAR Filing Document

**Accession Number:** 0001409269
**File Stem:** 0001437749-25-026941
**Filing Date:** 2025-8
**Character Count:** 300695
**Document Hash:** 21f4378c8488dd57097af6239a4eb319
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001437749-25-026941.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001437749-25-026941

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 98

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Venus Concept Inc.
- **CENTRAL INDEX KEY:** 0001409269
- **STANDARD INDUSTRIAL CLASSIFICATION:** SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 061681204
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38238
- **FILM NUMBER:** 251219413

**BUSINESS ADDRESS:**
- **STREET 1:** 235 YORKLAND BLVD.
- **STREET 2:** SUITE 900
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M2J 4Y8
- **BUSINESS PHONE:** 877-848-8430 X117

**MAIL ADDRESS:**
- **STREET 1:** 235 YORKLAND BLVD.
- **STREET 2:** SUITE 900
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M2J 4Y8

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Restoration Robotics, Inc.
- **DATE OF NAME CHANGE:** 20171121

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Restoration Robotics Inc
- **DATE OF NAME CHANGE:** 20070808

?xml version='1.0' encoding='ASCII'? vero20250630_10q.htm

[**Table of Contents**](#toc)

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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 June 30, 2025**

**OR**

**☐** **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**

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## Venus Concept Inc.
**(Exact Name of Registrant as Specified in its Charter)**

------

---

| | |
|:---|:---|
| **Delaware** | **06-1681204** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(I.R.S. Employer**<br> **Identification No.)** |
| **235 Yorkland Blvd., Suite 900**<br> **Toronto, Ontario M2J 4Y8**<br> **(877) 848-8430**<br> **(Address including zip code, and telephone number including area code, of registrant**'**s principal executive offices)** | **235 Yorkland Blvd., Suite 900**<br> **Toronto, Ontario M2J 4Y8**<br> **(877) 848-8430**<br> **(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 ☒&nbsp;&nbsp;&nbsp;&nbsp;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).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;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).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐&nbsp;&nbsp;&nbsp;&nbsp;No ☒

As of August 8, 2025 the registrant had 1,859,123 shares of common stock, $0.0001 par value per share, outstanding.

------

[**Table of Contents**](#toc)

**Table of Contents**

---

| | | |
|:---|:---|:---|
|  |  | **Page** |
| **Part I.** | [**Financial Information**](#p1) | [2](#p1) |
| **Item 1.** | [**Condensed Consolidated Financial Statements (unaudited)**](#p1i1) | [2](#p1i1) |
|  | [Condensed Consolidated Balance Sheets](#bal) | [2](#bal) |
|  | [Condensed Consolidated Statements of Operations](#ops) | [3](#ops) |
|  | [Condensed Consolidated Statements of Comprehensive Loss](#comp) | [4](#comp) |
|  | [Condensed Consolidated Statements of Stockholders' Equity (Deficit](#equity)) | [5](#equity) |
|  | [Condensed Consolidated Statements of Cash Flows](#cash) | [6](#cash) |
|  | [Notes to the Condensed Consolidated Financial Statements](#notes) | [7](#notes) |
| **Item 2.** | **[Management's Discussion and Analysis of Financial Condition and Results of Operations](#p1i2)** | [25](#p1i2) |
| **Item 3.** | **[Quantitative and Qualitative Disclosures About Market Risk](#p1i3)** | [41](#p1i3) |
| **Item 4.** | **[Controls and Procedures](#p1i4)** | [41](#p1i4) |
| **PART II.** | **[Other Information](#p2)** | [42](#p2) |
| **Item 1.** | **[Legal Proceedings](#p2i1)** | [42](#p2i1) |
| **Item 1A.** | **[Risk Factors](#p2i1a)** | [42](#p2i1a) |
| **Item 2.** | **[Unregistered Sales of Equity Securities and Use of Proceeds](#p2i2)** | [43](#p2i2) |
| **Item 3.** | **[Defaults Upon Senior Securities](#p2i3)** | [44](#p2i3) |
| **Item 4.** | **[Mine Safety Disclosures](#p2i4)** | [44](#p2i4) |
| **Item 5.** | **[Other Information](#p2i5)** | [44](#p2i5) |
| **Item 6.** | **[Exhibits](#p2i6)** | [44](#p2i6) |
| **[Signatures](#sig)** | **[Signatures](#sig)** | [45](#sig) |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; i

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[**Table of Contents**](#toc)

**PART I**

**ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**VENUS CONCEPT INC.**

**Condensed Consolidated Balance Sheets**

***(Unaudited)***

***<sub>(in thousands, except share and per share data)</sub>***

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| **ASSETS** |  |  |
| CURRENT ASSETS: |  |  |
| Cash and cash equivalents | $3878 | $4271 |
| Restricted cash | 987 |  |
| Accounts receivable, net of allowance of $2,916 and $3,402 as of June 30, 2025, and December 31, 2024, respectively | 15767 | 18721 |
| Inventories | 15860 | 17561 |
| Prepaid expenses | 779 | 828 |
| Advances to suppliers | 6050 | 6027 |
| Other current assets | 1787 | 1104 |
| Total current assets | 45108 | 48512 |
| LONG-TERM ASSETS: |  |  |
| Long-term receivables, net of allowance of $174 and $384 as of June 30, 2025 and December 31, 2024, respectively | 9641 | 8534 |
| Deferred tax assets | 950 | 1459 |
| Severance pay funds | 512 | 488 |
| Property and equipment, net | 940 | 936 |
| Operating right-of-use assets, net | 2684 | 3282 |
| Intangible assets | 3250 | 4973 |
| Total long-term assets | 17977 | 19672 |
| TOTAL ASSETS | $63085 | $68184 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| CURRENT LIABILITIES: |  |  |
| Trade payables | $5848 | $6484 |
| Accrued expenses and other current liabilities | 13011 | 11433 |
| Note payable | 18419 | 8271 |
| Unearned interest income | 885 | 907 |
| Warranty accrual | 803 | 917 |
| Deferred revenues | 914 | 953 |
| Operating lease liabilities | 1238 | 1322 |
| Total current liabilities | 41118 | 30287 |
| LONG-TERM LIABILITIES: |  |  |
| Long-term debt | 15866 | 31437 |
| Accrued severance pay | 543 | 528 |
| Unearned interest income | 401 | 364 |
| Warranty accrual | 174 | 222 |
| Operating lease liabilities | 1538 | 1997 |
| Other long-term liabilities | 673 | 511 |
| Total long-term liabilities | 19195 | 35059 |
| TOTAL LIABILITIES | 60313 | 65346 |
| Commitments and Contingencies (Note 9) |  |  |
| STOCKHOLDERS' EQUITY (Note 14): |  |  |
| Common Stock, $0.0001 par value: 300,000,000 shares authorized as of June 30, 2025 and December 31, 2024; 1,859,123 and 709,130 issued and outstanding as of June 30, 2025, and December 31, 2024, respectively | 31 | 30 |
| Additional paid-in capital | 335279 | 311238 |
| Accumulated deficit | (332983) | (308899) |
| TOTAL STOCKHOLDERS' EQUITY | 2327 | 2369 |
| Non-controlling interests | 445 | 469 |
|  | 2772 | 2838 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $63085 | $68184 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2

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[**Table of Contents**](#toc)

**VENUS CONCEPT INC.**

**Condensed Consolidated Statements of Operations**

***(Unaudited)***

***<sub>(in thousands, except per share data);</sub>***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| **Revenue** |  |  |  |  |
| Leases | $4681 | $4455 | $7330 | $8048 |
| Products and services | 11011 | 12127 | 22005 | 26013 |
|  | 15692 | 16582 | 29335 | 34061 |
| Cost of goods sold: |  |  |  |  |
| Leases | 1269 | 410 | 2113 | 1887 |
| Products and services | 4992 | 4323 | 9036 | 8678 |
|  | 6261 | 4733 | 11149 | 10565 |
| Gross profit | 9431 | 11849 | 18186 | 23496 |
| Operating expenses: |  |  |  |  |
| Selling and marketing | 7685 | 7048 | 14677 | 14422 |
| General and administrative | 9433 | 8660 | 19168 | 18908 |
| Research and development | 1354 | 1737 | 2910 | 3522 |
| Total operating expenses | 18472 | 17445 | 36755 | 36852 |
| Loss from operations | (9041) | (5596) | (18569) | (13356) |
| Other expenses: |  |  |  |  |
| Foreign exchange (gain) loss | (545) | 774 | (664) | 1098 |
| Finance expenses | 1167 | 2452 | 2737 | 4120 |
| Loss on debt extinguishment | 1865 | 10901 | 2914 | 10901 |
| Loss before income taxes | (11528) | (19723) | (23556) | (29475) |
| Income tax expense | 214 | 141 | 552 | 178 |
| Net loss | $(11742) | $(19864) | $(24108) | $(29653) |
| Net loss attributable to stockholders of the Company | $(11721) | $(19951) | $(24084) | $(29745) |
| Net (loss) income attributable to non-controlling interest | $(21) | $87 | $(24) | $92 |
| Net loss per share: |  |  |  |  |
| Basic | $(8.03) | $(30.93) | $(22.18) | $(48.60) |
| Diluted | $(8.03) | $(30.93) | $(22.18) | $(48.60) |
| Weighted-average number of shares used in per share calculation: |  |  |  |  |
| Basic | 1459 | 645 | 1086 | 612 |
| Diluted | 1459 | 645 | 1086 | 612 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3

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[**Table of Contents**](#toc)

**VENUS CONCEPT INC.**

**Condensed Consolidated Statements of Comprehensive Loss** 

***(Unaudited)***

***<sub>(in thousands)</sub>***

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Net loss | $(11742) | $(19864) | $(24108) | $(29653) |
| Loss attributable to stockholders of the Company | (11721) | (19951) | (24084) | (29745) |
| Income (loss) attributable to non-controlling interest | (21) | 87 | (24) | 92 |
| Comprehensive loss | $(11742) | $(19864) | $(24108) | $(29653) |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4

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[**Table of Contents**](#toc)

**VENUS CONCEPT INC.**

**Condensed Consolidated Statements of Stockholders**' **Equity (Deficit)**

***(Unaudited)***

***(in thousands, except share data)***

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | ***Preferred Shares*** |  |  | ***Common Stock*** | ***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 | 1835000 | 1575810 | 289936 | 780569 | 709130 | $30 | $311238 | $(308899) | $469 | $2838 |
| Net loss — the Company | *—* | *—* | *—* | *—* | *—* |  |  | (12363) |  | (12363) |
| Net loss — non-controlling interest | *—* | *—* | *—* | *—* | *—* |  |  |  | (3) | (3) |
| Exchange of Convertible Notes for Series Y Private Placement shares |  |  |  | 379311 |  |  | 12049 |  |  | 12049 |
| 2023 Series X Private Placement shares dividends |  |  | 9061 |  |  |  |  |  |  |  |
| Stock-based compensation | *—* | *—* | *—* | *—* | *—* |  | 207 |  |  | 207 |
| Balance — March 31, 2025 | 1835000 | 1575810 | 298997 | 1159880 | 709130 | $30 | $323494 | $(321262) | $466 | $2728 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss — the Company | *—* | *—* | *—* | *—* | *—* |  |  | (11721) |  | (11721) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net loss — non-controlling interest | *—* | *—* | *—* | *—* | *—* |  |  |  | (21) | (21) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exchange of Convertible Notes for Series Y Private Placement shares |  |  |  | 325651 |  |  | 8365 |  |  | 8365 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2023 Series X Private Placement shares dividends |  |  | 9344 |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2025 Registered Direct Offering shares and warrants, net of costs |  |  |  |  | 1149993 | 1 | 3283 |  |  | 3284 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | *—* | *—* | *—* | *—* | *—* |  | 137 |  |  | 137 |
| Balance — June 30, 2025 | 1835000 | 1575810 | 308341 | 1485531 | 1859123 | $31 | $335279 | $(332983) | $445 | $2772 |

---

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  | ***Preferred Shares*** |  |  | ***Common Stock*** | ***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 | 3185000 | 1575810 | 256356 |  | 552205 | $30 | $247854 | $(261903) | $570 | $(13449) |
| Issuance of common stock |  |  |  |  | 758 | 0\* | 10 |  |  | 10 |
| 2024 Registered Direct Offering shares and warrants, net of costs |  |  |  |  | 74342 |  | 977 |  |  | 977 |
| 2023 Series X Private Placement shares dividends |  |  | 8012 |  |  |  |  |  |  |  |
| Net loss - the Company | *—* | *—* | *—* | *—* | *—* |  |  | (9794) |  | (9794) |
| Net income - non-controlling interest | *—* | *—* | *—* | *—* | *—* |  |  |  | 5 | 5 |
| Stock-based compensation | *—* | *—* | *—* | *—* | *—* |  | 339 |  |  | 339 |
| Balance — March 31, 2024 | 3185000 | 1575810 | 264368 |  | 627305 | $30 | $249180 | $(271697) | $575 | $(21912) |
| Exchange of MSLP Loan for Series Y Private Placement shares |  |  |  | 576986 |  |  | 45901 |  |  | 45901 |
| Conversion of 2022 Private Placement shares | (1350000) |  |  |  | 81825 | 0\* |  |  |  |  |
| 2023 Series X Private Placement shares dividends |  |  | 8025 |  |  |  |  |  |  |  |
| Net loss - the Company | *—* | *—* | *—* | *—* | *—* |  |  | (19951) |  | (19951) |
| Net income - non-controlling interest | *—* | *—* | *—* | *—* | *—* |  |  |  | 87 | 87 |
| Stock-based compensation | *—* | *—* | *—* | *—* | *—* |  | 239 |  |  | 239 |
| Balance — June 30, 2024 | 1835000 | 1575810 | 272393 | 576986 | 709130 | $30 | $295320 | $(291648) | $662 | $4364 |

---

\*: Presented as $0 due to rounding.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5

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[**Table of Contents**](#toc)

**VENUS CONCEPT INC.**

**Condensed Consolidated Statements of Cash Flows**

***(Unaudited)***

***<sub>(in thousands)</sub>***

---

| | | |
|:---|:---|:---|
|  | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(24108) | $(29653) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 1904 | 1952 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation | 344 | 578 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for expected credit losses | 2330 | 444 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provision for inventory obsolescence | 886 | 723 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Finance expenses and accretion | 2737 | 2526 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred tax expense (recovery) | 509 | (176) |
| Loss on extinguishment of debt | 2914 | 10901 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on disposal of property and equipment | 11 | 19 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts receivable short-term and long-term | (163) | 5962 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Inventories | 815 | 2567 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepaid expenses | 49 | 289 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Advances to suppliers | (23) | 1064 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other current assets | (504) | 669 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Operating right-of-use assets, net | 598 | 610 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term assets | (320) | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Trade payables | (601) | (1611) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accrued expenses and other current liabilities | 1423 | 225 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Current operating lease liabilities | (84) | (158) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Severance pay funds | (24) | 152 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unearned interest income | 15 | (503) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term operating lease liabilities | (459) | (549) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other long-term liabilities | (7) | (239) |
| Net cash used in operating activities | (11758) | (4210) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment | (197) | (47) |
| Net cash used in investing activities | (197) | (47) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| Proceeds from issuance of common stock | 1 | 10 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2024 Registered Direct Offering shares and warrants, net of costs of $222 |  | 976 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2024 Convertible Notes issued to EW, net of costs of $393 |  | 1607 |
| 2025 Registered Direct Offering shares and warrants, net of costs $589 | 3283 |  |
| Proceeds from Short-term Bridge Financing by Madryn, net of costs of $35 (2024- $238) | 9265 | 2000 |
| Net cash provided by financing activities | 12549 | 4593 |
| NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | 594 | 336 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of period | 4271 | 5396 |
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH — End of period | $4865 | $5732 |
| **SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for income taxes, net of refunds received | $(17) | $69 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash paid for interest | $— | $1594 |

---

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6

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[**Table of Contents**](#toc)

**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.

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, the Transaction *may* close in the *third* quarter of *2025.*

**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 *June 30, 2025* and *December 31, 2024*, the Company had an accumulated deficit of $332,983 and $308,899, respectively, though, the Company was in compliance with all required covenants as of *June 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.

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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *7*

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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 *six* months ended *June 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 *June 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.

***New Accounting Policy*** – ***Restricted Cash***

Beginning in the quarter ended *June 30, 2025* the Company established a restricted cash account. Restricted cash represents amounts that are legally or contractually restricted as to withdrawal or use. These funds are *not* available for general corporate purposes. As of *June 30, 2025,* and *December 31, 2024,* the Company was required to hold $987 and $nil, respectively, in a separate deposit account as collateral for the *2024* Notes related to the ERC Claim (see Note *12*).

***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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *8*

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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 June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Numerator: |  |  |  |  |
| Net loss | $(11742) | $(19864) | $(24108) | $(29653) |
| Net loss allocated to stockholders of the Company | $(11721) | $(19951) | $(24084) | $(29745) |
| Denominator: |  |  |  |  |
| Weighted-average shares of common stock outstanding used in computing net loss per share, basic | 1459 | 645 | 1086 | 612 |
| Weighted-average shares of common stock outstanding used in computing net loss per share, diluted | 1459 | 645 | 1086 | 612 |
| Net loss per share: |  |  |  |  |
| Basic | $(8.03) | $(30.93) | $(22.18) | $(48.60) |
| Diluted | $(8.03) | $(30.93) | $(22.18) | $(48.60) |

---

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 *June 30, 2025* and *2024* because including them would have been antidilutive:

---

| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***June 30, 2024*** |
| Options to purchase common stock | 74659 | 93577 |
| Preferred stock | 14278311 | 5986355 |
| Shares reserved for convertible notes | 219257 | 250568 |
| Warrants for common stock | 1062584 | 176144 |
| Total potential dilutive shares | 15634811 | 6506644 |

---

***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.

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 June 30, 2025*** | ***Fair Value Measurements as of June 30, 2025*** | ***Fair Value Measurements as of June 30, 2025*** | ***Fair Value Measurements as of June 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 | $— | $30 | $— | $30 |
| Total assets | $— | $30 | $— | $30 |
| Liabilities |  |  |  |  |
| Derivative Liability |  |  | 311 | 311 |
| Total liabilities | $— | $— | $311 | $311 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Fair Value Measurements as of December 31, 2024*** | ***Fair Value Measurements as of December 31, 2024*** | ***Fair Value Measurements as of December 31, 2024*** | ***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 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Derivative Liability | $— | $— | $175 | $175 |
| Total liabilities | $— | $— | $175 | $175 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *9*

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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 $19,004 and $19,262 as of *June 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 *June 30, 2025* and *December 31, 2024*. Based upon such assessment, the Company recorded an allowance for expected credit losses totaling $3,090 and $3,786 as of *June 30, 2025*, and *December 31, 2024*, respectively.

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

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Gross accounts receivable | $28498 | $31041 |
| Unearned income | (1286) | (1271) |
| Allowance for expected credit losses | (3090) | (3786) |
|  | $24122 | $25984 |
| Reported as: |  |  |
| Current trade receivables | $15767 | $18721 |
| Current unearned interest income | (885) | (907) |
| Long-term trade receivables | 9641 | 8534 |
| Long-term unearned interest income | (401) | (364) |
|  | $24122 | $25984 |

---

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:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  |  | **June 30,** | **June 30,** | **June 30,** | **June 30,** | **June 30,** |
|  | **Total** | **2025** | **2026** | **2027** | **2028** | **2029** |
| Current financing receivables, net of allowance of $580 | $9363 | $9363 | $— | $— | $— | $— |
| Long-term financing receivables, net of allowance of $174 | 9641 |  | 6097 | 3467 | 77 |  |
|  | $19004 | $9363 | $6097 | $3467 | $77 | $— |

---

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 | $7415 |
| Write-offs | (5055) |
| Provision | 1426 |
| Balance at December 31, 2024 | $3786 |
| Write-offs | (1906) |
| Provision | 1172 |
| Balance at March 31, 2025 | $3052 |
| Write-offs | (1119) |
| Provision | 1157 |
| Balance at June 30, 2025 | $3090 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *10*

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***6.* SELECT BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION**

***Inventory***

Inventory consists of the following:

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Raw materials | $1424 | $1649 |
| Work-in-progress | 1366 | 1658 |
| Finished goods | 13070 | 14254 |
| Total inventory | $15860 | $17561 |

---

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 $5,448 and $9,689 in cost of goods sold in the *three* and *six* months ended *June 30, 2025,* respectively. The Company expensed $4,084 and $9,203 in cost of goods sold in the *three* and *six* months ended *June 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 *June 30, 2025* and *December 31, 2024*, a provision for obsolescence of $2,560 and $1,977 was taken against inventory, respectively.

***Property and Equipment, Net***

Property and equipment, net consist of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | ***Useful Lives*** | ***June 30,*** | ***December 31,*** |
|  | ***(in years)*** | ***2025*** | ***2024*** |
| Lab equipment tooling and molds | 4 – 10 | $4549 | $4549 |
| Office furniture and equipment | 6 – 10 | 1179 | 1160 |
| Leasehold improvements | up to 10 | 773 | 752 |
| Computers and software | 3 | 986 | 863 |
| Vehicles | 5 – 7 | 57 | 57 |
| Demo units | 5 | 298 | 214 |
| Total property and equipment |  | 7842 | 7595 |
| Less: Accumulated depreciation |  | (6902) | (6659) |
| Total property and equipment, net |  | $940 | $936 |

---

Depreciation expense amounted to $89 and $113 for the *three* months ended *June 30, 2025* and *2024*, respectively. Depreciation expense was $182 and $225 for the *six* months ended *June 30, 2025* and *2024,* respectively.

***Other Current Assets***

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Government remittances <sup>(1)</sup> | $535 | $560 |
| Consideration receivable from subsidiaries sale | 33 | 49 |
| Sundry assets and miscellaneous | 1219 | 495 |
| Total other current assets | $1787 | $1104 |

---

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

***Accrued Expenses and Other Current Liabilities***

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Payroll and related expense | $4446 | $3336 |
| Accrued expenses | 4329 | 3552 |
| Commission accrual | 1859 | 2096 |
| Sales and consumption taxes | 2377 | 2449 |
| Total accrued expenses and other current liabilities | $13011 | $11433 |

---

***Warranty Accrual***

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

---

| | | |
|:---|:---|:---|
|  | ***June 30,*** | ***December 31,*** |
|  | ***2025*** | ***2024*** |
| Balance as of the beginning of the period | $1139 | $1363 |
| Warranties issued during the period | 66 | 727 |
| Warranty costs incurred during the period | (228) | (951) |
| Balance at the end of the period | $977 | $1139 |
| Current | 803 | 917 |
| Long-term | 174 | 222 |
| &nbsp;&nbsp;&nbsp; Total | $977 | $1139 |

---

***Finance Expenses***

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

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Interest expense | $1110 | $1830 | $2430 | $3907 |
| Change in fair value of derivative liability | (29) |  | 137 | (618) |
| Accretion on long-term debt and amortization of fees | 86 | 622 | 170 | 831 |
| Total finance expenses | $1167 | $2452 | $2737 | $4120 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *11*

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***7.* LEASES**

The following presents the various components of lease costs.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Operating lease cost | $339 | $369 | $672 | $755 |
| Total lease cost | $339 | $369 | $672 | $755 |

---

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 June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Operating cash outflows from operating leases | $339 | $369 | $672 | $755 |

---

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

---

| | | |
|:---|:---|:---|
|  | ***At June 30,*** | ***At June 30,*** |
|  | ***2025*** | ***2024*** |
| Operating leases |  |  |
| Weighted-average remaining lease term | 1.60 yrs. | 1.94 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.

---

| | |
|:---|:---|
| **<u>Years ending December 31,</u>** | ***Operating leases*** |
| 2025 | $647 |
| 2026 | 1167 |
| 2027 | 620 |
| 2028 | 195 |
| 2029 | 192 |
| Thereafter | 128 |
| Imputed Interest <sup>(1)</sup> | (173) |
| Total | $2776 |

---

<sup>(*1*)</sup> Imputed interest represents the difference between undiscounted cash flows and cash flows.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *12*

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***8.* INTANGIBLE ASSETS** 

Intangible assets net of accumulated amortization were as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | ***At June 30, 2025*** | ***At June 30, 2025*** | ***At June 30, 2025*** |
|  | ***Gross Amount*** | ***Accumulated Amortization*** | ***Net Amount*** |
| Customer relationships | $1400 | $(662) | $738 |
| Brand | 2500 | (1723) | 777 |
| Technology | 16900 | (15950) | 950 |
| Supplier agreement | 3000 | (2215) | 785 |
| Total intangible assets | $23800 | $(20550) | $3250 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | ***At December 31, 2024*** | ***At December 31, 2024*** | ***At December 31, 2024*** |
|  | ***Gross Amount*** | ***Accumulated Amortization*** | ***Net Amount*** |
| Customer relationships | $1400 | $(616) | $784 |
| Brand | 2500 | (1593) | 907 |
| Technology | 16900 | (14553) | 2347 |
| Supplier agreement | 3000 | (2065) | 935 |
| Total intangible assets | $23800 | $(18827) | $4973 |

---

For the *three* months ended *June 30, 2025* and *2024*, amortization expense was $866 and $863, respectively. For the *six* months ended *June 30, 2025* and *2024,* amortization expense was $1,723 and $1,727 respectively.

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

---

| | |
|:---|:---|
| **<u>Years ending December 31,</u>** |  |
| 2025 | $1281.0 |
| 2026 | 657.0 |
| 2027 | 657.0 |
| 2028 | 244.0 |
| 2029 | 93.0 |
| Thereafter | 318.0 |
| Total | $3250.0 |

---

***9.* COMMITMENTS AND CONTINGENCIES**

***Commitments***

As of *June 30, 2025*, the Company has non-cancellable purchase orders placed with its contract manufacturers in the amount of $13.1 million. In addition, as of *June 30, 2025*, the Company had $0.4 million of open purchase orders that can be cancelled with *270* days' notice.

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

---

| | |
|:---|:---|
| **<u>Years ending December 31,</u>** | ***Purchase and Service Commitments*** |
| 2025 | $13016 |
| 2026 and Thereafter | 47 |
| Total | $13063 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *13*

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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.

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.

As of *June 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 *June 30, 2025* are as follows:

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| | |
|:---|:---|
|  | ***As of June 30, 2025*** |
| 2025 | $73 |
| 2026 | 3065 |
| Total | $3138 |

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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.

As of *June 30, 2025,* the Company had approximately $11,096 principal and interest of convertible notes outstanding that were issued pursuant to the *June 2025* Exchange Agreement.

In connection with the New Convertible Notes and Notes, the Company recognized interest expense of $581 and $861 during the *three* months ended *June 30, 2025* and *2024,* respectively and recognized interest expense of $1,495 and $1,695 during the *six* months ended *June 30, 2025* and *2024,* respectively. The conversion feature, providing the Madryn Noteholders with a right to receive the Company's shares upon conversion of the New Convertible Notes and Notes, was qualified for a scope exception in ASC *815*-*10*-*15* and did *not* require bifurcation. The New Convertible Notes and Notes also contained embedded redemption features that provided multiple redemption alternatives. Certain redemption features provided the Madryn Noteholders with a right to receive cash and a variable number of shares upon change of control and an event of default (as defined in the New Notes and Notes). The Company evaluated redemption upon change of control and an event of default under ASC *815,* Derivatives and Hedging, and determined that these *two* redemption 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 scheduled payments, inclusive of principal and interest, on the outstanding borrowings of the Notes and New Convertible Notes as of *June 30, 2025* totals $13,473 and are due in *2026.* For the *three* and *six* months ended *June 30, 2025*, the Company did not make any principal repayments.

*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.*

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.*

The scheduled payments, inclusive of principal and interest of $18,609 will be paid at maturity.

For the *three* and *six* months ended *June 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 *June 30, 2025,* the Company had approximately $2.439 million 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 $0.1 and $0.2 million during the *three* and *six* months ended *June 30, 2025,* 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 *June 30, 2025* were $0.9 million and $0.3 million, respectively.

As of *June 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 *six* months ended *June 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.

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| | | |
|:---|:---|:---|
|  | ***June 30, 2025*** | ***December 31, 2024*** |
| Outstanding common stock warrants | 1062584 | 153147 |
| Outstanding stock options and RSUs | 74659 | 89325 |
| Preferred shares | 14278311 | 7852840 |
| Shares reserved for conversion of future voting preferred share issuance | 484003 | 500735 |
| Shares reserved for future option grants and RSUs | 72114 | 29094 |
| Shares reserved for Madryn Noteholders | 118182 | 118182 |
| Shares reserved for EW Noteholders | 190910 | 190910 |
| Total common stock reserved for issuance | 16280763 | 8934233 |

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***14.* STOCKHOLDERS' EQUITY**

*Common Stock*

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

• 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;

• 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

• 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.

*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.*

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*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:

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

• *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.

• *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.

• *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.

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

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

*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:

• *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.

• *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.

• *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.

• *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.

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

• *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:

• *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.

• *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).

• *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.

• *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.

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

• *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. 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, or automatically subject to certain conditions.

• *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.

*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 "Placement Agent Warrants"). The Placement Agent Warrants are substantially similar to the *2024* Investor Warrants, except that the initial exercise price of the Placement Agent Warrants is $20.1438 per share.

*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 "Placement Agent Warrants").

The Placement Agent Warrants (and the shares of common stock issuable upon the exercise of the 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 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, an "Investor"), pursuant to which the Company agreed to issue and sell to the 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, 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 "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 Investor Warrants within the prescribed period set forth in the 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 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 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 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").

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 30,430 shares of Common Stock (the "Placement Agent Warrants"). The Placement Agent Warrants are substantially similar to the Investor Warrants, except that the initial exercise price of the Placement Agent Warrants is $3.3125 per share.

*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 *June 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 6,059 (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 *June 30, 2025*, there were 59,388 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Cost of sales | $14 | $9 | $39 | $19 |
| Selling and marketing | 37 | 60 | 90 | 132 |
| General and administrative | 83 | 146 | 205 | 376 |
| Research and development | 3 | 24 | 10 | 51 |
| Total stock-based compensation | $137 | $239 | $344 | $578 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *18*

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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 June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Number of Shares*** | ***Weighted- Average Exercise Price per Share, $*** | ***Weighted- Average Remaining Contractual Term*** | ***Aggregate Intrinsic Value*** |
| Outstanding – January 1, 2025 | 89325 | $192.68 | 6.88 | $— |
| &nbsp;&nbsp;&nbsp; Options granted |  |  | *-* |  |
| &nbsp;&nbsp;&nbsp; Options exercised |  |  | *-* | *—* |
| &nbsp;&nbsp;&nbsp; Options forfeited/cancelled | (14666) | 193.36 | *-* | *—* |
| Outstanding – June 30, 2025 | 74659 | 192.54 | 6.57 | $— |
| Exercisable – June 30, 2025 | 51792 | 252.19 | 6.11 | $— |
| Expected to vest – after June 30, 2025 | 22867 | $57.46 | 7.61 | $— |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *19*

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

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Options Outstanding** | **Options Outstanding** | **Options Outstanding** | **Options Exercisable** | **Options Exercisable** | **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 | 71360 | 6.77 | $143.42 | 48501 | 6.37 | $184.14 |
| $702.90 - $1,311.75 | 3095 | 2.21 | 1085.85 | 3087 | 2.20 | 1085.27 |
| $2,054.25 - $4,207.50 | 159 | 3.17 | 3033.98 | 159 | 3.17 | 3033.98 |
| $4,455.00 - $4,826.25 | 18 | 0.49 | 4475.63 | 18 | 0.49 | 4475.63 |
| $7,152.75 - $10,543.50 | 27 | 2.94 | 8044.67 | 27 | 2.94 | 8044.67 |
|  | 74659 | 6.57 | $192.54 | 51792 | 6.11 | $252.19 |

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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$niland $nil for the *three* months ended *June 30, 2025* and *2024,* respectively. The total intrinsic value of options exercised were $nil and $nil for the *six* months ended *June 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 *June 30, 2025* and *2024,* respectively. The weighted-average grant date fair value of options granted was $nil and $0.705 per share for the *six* months ended *June 30, 2025* and *2024,* respectively. The fair value of options vested during the *three* months ended *June 30, 2025* and *2024* was $156 and $264, respectively. The fair value of options vested during the *six* months ended *June 30, 2025* and *2024* was $388 and $625, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *20*

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***15.* INCOME TAXES** 

The Company generated a loss and recognized $214 of tax expense for the *three* months ended *June 30, 2025*, and $141 of tax expense for the *three* months ended *June 30, 2024*, respectively. The Company generated a loss and recognized $552 of tax expense for the *six* months ended *June 30, 2025* and $178 of tax expense for the *six* months ended *June 30, 2024,* respectively. A reconciliation of income tax expense is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Loss before income taxes | $(11528) | $(19723) | $(23556) | $(29475) |
| Theoretical tax expense at the statutory rate (21% in 2025 and 2024) | (2421) | (4142) | (4947) | (6190) |
| Differences in jurisdictional tax rates | (453) | (915) | (914) | (1370) |
| Valuation allowance | 2784 | 4836 | 5467 | 7322 |
| Non-deductible expenses | (35) | 362 | 192 | 416 |
| Book to tax filing adjustments | 339 |  | 754 |  |
| Total income tax provision | 214 | 141 | 552 | 178 |
| &nbsp;&nbsp;&nbsp; Net loss | $(11742) | $(19864) | $(24108) | $(29653) |

---

Income tax expense is recognized based on the actual loss incurred during the *three* and *six* months ended *June 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 June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| United States | $9727 | $9280 | $18134 | $19353 |
| International | 5965 | 7302 | 11201 | 14708 |
| Total revenue | $15692 | $16582 | $29335 | $34061 |

---

As of *June 30, 2025*, long-lived assets in the amount of $3,522 were located in the United States and $668 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *21*

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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.*&nbsp;&nbsp;&nbsp;&nbsp;Lease revenue – includes all system sales with typical lease terms of 36 months.

*2.*&nbsp;&nbsp;&nbsp;&nbsp;System revenue – includes all systems sales with payment terms within 12 months.

*3.*&nbsp;&nbsp;&nbsp;&nbsp;Product revenue – includes skincare, hair and other consumables payable upon receipt.

*4.*&nbsp;&nbsp;&nbsp;&nbsp;Service revenue – includes extended warranty sales.

The following table presents revenue by type:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | ***Three Months Ended June 30,*** | ***Three Months Ended June 30,*** | ***Six Months Ended June 30,*** | ***Six Months Ended June 30,*** |
|  | ***2025*** | ***2024*** | ***2025*** | ***2024*** |
| Lease revenue | $4681 | $4517 | $7330 | $8048 |
| System revenue | 7939 | 8588 | 15842 | 19123 |
| Product revenue | 2444 | 2647 | 4864 | 5204 |
| Service revenue | 628 | 830 | 1299 | 1686 |
| Total revenue | $15692 | $16582 | $29335 | $34061 |

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***17.* RELATED PARTY TRANSACTIONS**

There were *no* related party transactions for the *three* and *six* months ended *June 30, 2025* and *2024,* respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *22*

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***18.* SUBSEQUENT EVENTS**

*<u>**Tenth Delayed Drawdown**</u>*

On *July 21, 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 "Tenth Delayed Drawdown"). The Tenth Delayed Drawdown was funded on *July 21, 2025.* 

***<u>*July* and *August 2025* MSLP Consent Agreement</u>***

On *July 31, 2025,* the Loan Parties entered into a Consent Agreement with the Lenders (the *"July* Consent Agreement"). The *July* Consent Agreement granted relief under the 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 (the *"August* Consent Agreement"). The *August* Consent Agreement granted relief under the MSLP Loan Agreement, (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 *August* Consent Agreement) to the respective outstanding principal balance of each Note.

***<u>Seventeenth and Eighteenth Bridge Loan Amendment</u>***

On *July 31, 2025,* the Loan Parties entered into a Seventeenth Bridge Loan Amendment Agreement with the Lenders (the "Seventeenth Bridge Loan Amendment"). The Seventeenth Bridge Loan Amendment amended the Bridge Loan 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 (the "Eighteenth Bridge Loan Amendment"). The Eighteenth Bridge Loan Amendment amended the Bridge Loan to, among other things, (i) extend the maturity date of the Bridge Loan from *August 6, 2025* to *August 31, 2025; (*ii) establish a *50%* threshold for a change of control event, and (iii) add or update customary negative covenants and events of default.

***<u>*July* and *August 2025* Notes Consent Agreement</u>***

On *July 31, 2025,* the Loan Parties entered into a Consent Agreement with the Lenders (the *"July* Notes Consent Agreement). The *July* Notes Consent Agreement granted relief under the *2025* Notes, such that certain minimum liquidity requirements under *2025* Notes are waived through *August 6, 2025.*

On *August 6, 2025,* the Loan Parties entered into a Consent Agreement with the Lenders (the *"August* Notes Consent Agreement"). The *August* Notes Consent Agreement granted relief under the *2025* Notes, such that certain minimum liquidity requirements under *2025* Notes are waived through *August 31, 2025.*

***<u>Amendment to Series Y Preferred Stock Certificate of Designations</u>***

On *August 6, 2025,* the Company filed a Certificate of Amendment with the Secretary of State of the State of Delaware (the "Certificate of Amendment"), thereby amending the Certificate of Designations with respect to the Company's Series Y Preferred Stock, as filed with the Secretary of State of the State of Delaware on *May 24, 2024* and as amended by those certain Certificate of Amendments filed with the Secretary of State of the State of Delaware on *September 26, 2024, March 31, 2025* and *June 30, 2025 (*the "Certificate of Designations"). The Certificate of Amendment became effective upon filing.

The Certificate of Amendment amends the Certificate of Designations to, among other things, eliminate 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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *23*

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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.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 24

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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* June 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 six months ended June 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 June 30, 2025 and December 31, 2024, we had an accumulated deficit of $333.0 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 June 30, 2025 and December 31, 2024, we had cash, cash equivalents, and restricted cash of $4.9 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.

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 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 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.

***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 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) 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 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 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 Offering, (iii) reimbursement of certain expenses and (iv) Placement Agent Warrants to acquire up to an aggregate of 30,430 shares of Common Stock. The Placement Agent Warrants are substantially similar to the Investor Warrants, except that the initial exercise price of the 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.

***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 June 30, 2025, an aggregate of $9.3 million in additional delayed draws were funded.

From May 24, 2024 through June 30, 2025 the Loan Parties entered into Bridge Financing Amendments Two through Sixteen, which among other things, extended the maturity date to July 31, 2025, increased the delayed draw commitment from $2.8 million to $21.0 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.

The transactions are discussed in 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:

• 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);

• marketing supplies and kits;

• consumables and disposables;

• service revenue; and

• replacement applicators/handpieces.

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.

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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 32% and 30% of our aesthetic system revenues were derived from our internal lease programs in the six months ended June 30, 2025 and June 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 June 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 June 30, 2025 and 2024 were $15.7 million and $16.6 million, respectively. Our revenues for the six months ended June 30, 2025 and 2024 were $29.3 and $34.1 million, respectively. We had a net loss attributable to the Company of $11.7 million and $20.0 million in the three months ended June 30, 2025 and 2024, respectively. We had a net loss attributable to the Company of $24.1 and $29.7 million in the six months ended June 30, 2025 and 2024, respectively. We had an Adjusted EBITDA loss of $8.8 million and $4.1 million for the three months ended June 30, 2025, and 2024, respectively. We had an Adjusted EBITDA loss of $17.2 and $9.3 million for the six months ended June 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Reconciliation of net loss to adjusted EBITDA** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
| Net loss | $(11742) | $(19864) | $(24108) | $(29653) |
| Foreign exchange (gain) loss | (545) | 774 | (664) | 1098 |
| Loss on debt extinguishment | 1865 | 10901 | 2914 | 10901 |
| Finance expenses | 1167 | 2452 | 2737 | 4120 |
| Income tax expense | 214 | 141 | 552 | 178 |
| Depreciation and amortization | 955 | 977 | 1904 | 1952 |
| Stock-based compensation expense | 137 | 239 | 344 | 578 |
| ERC Claim recovery <sup>(4)</sup> | (1505) |  | (1505) |  |
| Top up to 401(k) under the Voluntary Correction Plan <sup>(3)</sup> | 516 |  | 516 |  |
| CEWS <sup>(1)</sup> |  |  |  | 418 |
| Other adjustments <sup>(2)</sup> | 93 | 238 | 120 | 1148 |
| Adjusted EBITDA | $(8845) | $(4142) | $(17190) | $(9260) |

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(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 six months ended June 30, 2025 and June 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:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| United States | 104 | 91 | 187 | 229 |
| International | 132 | 131 | 245 | 307 |
| Total systems delivered | 236 | 222 | 432 | 536 |

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***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 six months ended June 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 $1.1 million and $2.3 million during the three and six months ended June 30, 2025. This compares to $0.3 million and $0.5 million for the three and six months ended June 30, 2024. As of June 30, 2025, our allowance for expected credit losses was $3.1 million which represented approximately 11% of the gross outstanding accounts receivable as of this date. As of June 30, 2024 our allowance for expected credit losses was $4.2 million which represented 11% 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 10% (reduced from an initial increase of 17%) up to August 1, 2025 and subject to further negotiation. 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 have taken 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 include but are 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 maintain regular contact with our employees in Israel and have 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.

***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 six months ended June 30, 2025 primarily tracing to shipment delays and disruptions resulting from the Israel-Iran conflict 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 10% (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, are showing signs of moderation, the impact of such successive increases on cost structures remains, affecting governments, 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 June 30, 2025, our allowance for expected credit losses stands at $3.1 million, which represents 11% of the gross outstanding accounts receivable as of that date. This represents a decrease of $0.7 million or 18% 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.

*<u>System Revenue</u>*

For the three and six months ended June 30, 2025, approximately 37% and 32%, respectively, of our total system revenues were derived from our internal financing programs (Venus Prime and our legacy subscription model). For the three and six months ended June 30, 2024, approximately 34% and 30% of our total system revenues were derived from our internal financing programs. The decline is generally attributable to uncertainty about economic stability, and a significant tightening in credit markets in the U.S. and international markets due to higher interest rates, impacting our customers' ability and/or desire to secure capital equipment financing. To a lesser extent the decline in the three months ended June 30, 2025 was also impacted by supply chain disruptions due to the Israel-Iran conflict. 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 six months ended June 30, 2025 approximately 56% and 61%, respectively, of our total system revenues were derived from traditional sales. For the three and six months ended June 30, 2024, approximately 57% and 59%, respectively, of our total system revenues were derived form 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 six months ended June 30, 2025, approximately 7% and 7%, respectively, of our total system revenues were derived from distributor sales. For the three and six months ended June 30, 2024, approximately 9% and 11%, 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.

*<u>Procedure Based Revenue</u>*

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.

*<u>Other Product Revenue</u>*

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.

*<u>Service Revenue</u>*

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***

<u>*Selling and Marketing*</u> 

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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<u>*General and Administrative*</u>

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.

<u>*Research and Development*</u>

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.

<u>*Finance Expenses*</u>

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 7.6% for the MSLP Loan (now owned by Madryn), 13.5% for the Madryn Notes, and 13.6% for the 2024 Notes as of June 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 .

<u>*Foreign Exchange (Gain) Loss*</u>

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.

*<u>Loss on Debt Extinguishment</u>*

Loss on Debt Extinguishment is due to two exchanges: a) the March 2025 exchange of $28.0 million in aggregate principal 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 part of the March 2025 extinguishment of principal, the Company recognized a $1.0 million non-cash loss; and b) the June 2025 exchange of $17.0 million in aggregate principal 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 of principal, the Company recognized a $1.9 million non-cash loss.

<u>*Income Tax Expense*</u>

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 six months ended June 30, 2025.

<u>*Non-Controlling Interests*</u>

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).

**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 June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **Consolidated Statements of Loss:** | ***(dollars in thousands)*** | ***(dollars in thousands)*** | ***(dollars in thousands)*** | ***(dollars in thousands)*** |
| Revenues: |  |  |  |  |
| Leases | $4681 | $4455 | $7330 | $8048 |
| Products and services | 11011 | 12127 | 22005 | 26013 |
| Total revenue | 15692 | 16582 | 29335 | 34061 |
| Cost of goods sold: |  |  |  |  |
| Leases | 1269 | 410 | 2113 | 1887 |
| Products and services | 4992 | 4323 | 9036 | 8678 |
|  | 6261 | 4733 | 11149 | 10565 |
| Gross profit | 9431 | 11849 | 18186 | 23496 |
| Operating expenses: |  |  |  |  |
| Selling and marketing | 7685 | 7048 | 14677 | 14422 |
| General and administrative | 9433 | 8660 | 19168 | 18908 |
| Research and development | 1354 | 1737 | 2910 | 3522 |
| Total operating expenses | 18472 | 17445 | 36755 | 36852 |
| Loss from operations | (9041) | (5596) | (18569) | (13356) |
| Other expenses: |  |  |  |  |
| Foreign exchange (gain) loss | (545) | 774 | (664) | 1098 |
| Finance expenses | 1167 | 2452 | 2737 | 4120 |
| Loss on debt extinguishment | 1865 | 10901 | 2914 | 10901 |
| Loss before income taxes | (11528) | (19723) | (23556) | (29475) |
| Income tax expense | 214 | 141 | 552 | 178 |
| Net loss | $(11742) | $(19864) | $(24108) | $(29653) |
| Net loss attributable to stockholders of the Company | (11721) | (19951) | (24084) | (29745) |
| Net (loss) income attributable to non-controlling interest | (21) | 87 | (24) | 92 |
| **As a % of revenue:** |  |  |  |  |
| Revenues | 100% | 100% | 100% | 100% |
| Cost of goods sold | 39.9 | 28.5 | 38.0 | 31.0 |
| Gross profit | 60.1 | 71.5 | 62.0 | 69.0 |
| Operating expenses: |  |  |  |  |
| Selling and marketing | 49.0 | 42.5 | 50.0 | 42.3 |
| General and administrative | 60.1 | 52.2 | 65.3 | 55.5 |
| Research and development | 8.6 | 10.5 | 9.9 | 10.3 |
| Total operating expenses | 117.7 | 105.2 | 125.3 | 108.2 |
| Loss from operations | (57.6) | (33.7) | (63.3) | (39.2) |
| Foreign exchange (gain) loss | (3.5) | 4.7 | (2.3) | 3.2 |
| Finance expenses | 7.4 | 14.8 | 9.3 | 12.1 |
| Loss on debt extinguishment | 11.9 | 65.7 | 9.9 | 32.0 |
| Loss before income taxes | (73.5) | (118.9) | (80.3) | (86.5) |

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The following tables set forth our revenue by region and by product type for the periods indicated:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| **Revenues by region:** | **2025** | **2024** | **2025** | **2024** |
| United States | $9727 | $9280 | $18134 | $19353 |
| International | 5965 | 7302 | 11201 | 14708 |
| Total revenue | $15692 | $16582 | $29335 | $34061 |

---

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | ***(dollars in thousands)*** | ***(dollars in thousands)*** | ***(dollars in thousands)*** | ***(dollars in thousands)*** |
| **Revenues by product:** |  |  |  |  |
| Venus Prime / Subscription—Systems | $4681 | $4517 | $7330 | $8048 |
| Products—Systems | 7939 | 8588 | 15842 | 19123 |
| Products—Other <sup>(1)</sup> | 2444 | 2647 | 4864 | 5204 |
| Services <sup>(2)</sup> | 628 | 830 | 1299 | 1686 |
| Total revenue | $15692 | $16582 | $29335 | $34061 |

---

<sup>(1)</sup> Products-Other include ARTAS procedure kits, Viva tips, Glide and other consumables.

<sup>(2)</sup> Services include extended warranty sales.

***Comparison of the three months ended June 30, 2025 and 2024***

*Revenues*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |  |
|  | **2025** | **2024** | **2024** | **Change** |
| **(in thousands, except percentages)** | $**% of Total** | $**% of Total** | **% of Total** | **%** |
| Revenues: |  |  |  |  |
| Venus Prime / Subscription—Systems | 29.8 |  | 27.2 | 3.6 |
| Products—Systems | 50.6 |  | 51.8 | (7.6) |
| Products—Other | 15.6 |  | 16.0 | (7.7) |
| Services | 4.0 |  | 5.0 | (24.3) |
| Total | 100.0 |  | 100.0 | (5.4) |

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Total revenue decreased by $0.9 million, or 5.4%, to $15.7 million for the three months ended June 30, 2025 from $16.6 million for the three months ended June 30, 2024. The decrease in revenue is primarily attributed to the effects of customer uncertainty about economic stability, tighter third-party lending practices which negatively impacted capital equipment sales. Our international business was also impacted by the exiting of unprofitable direct markets. 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.

We sold an aggregate of 236 systems in the three months ended June 30, 2025 compared to 222 systems in the three months ended June 30, 2024. The percentage of systems revenue derived from our internal lease programs was approximately 37% and 34% during the three months ended June 30, 2025 and 2024, respectively. While this represents an uptick in internal lease program revenues, we remain committed to our strategy to prioritize cash deals over internal financing program deals in order to improve cash generation and preserve liquidity. Specific to the U.S. market, systems revenue derived from our internal lease programs was approximately 35% and 42% during the three months ended June 30, 2025 and 2024, respectively. The Company remains steadfast in ensuring that its in-house financing program accepts only qualified customers with the goal to reduce future credit losses, often at the expense of topline revenue.

Other product revenue was $2.4 million in the three months ended June 30, 2025 a 7.7% decrease compared to product revenue of $2.6 million in the three months ended June 30, 2024.

Services revenue was $0.6 million in the three months ended June 30, 2025, compared to $0.8 million in the three months ended June 30, 2024. The decrease is primarily due to the overall decline in device sales.

<u>*Cost of Goods Sold and Gross Profit*</u>

Cost of goods sold increased by $1.5 million, or 32.3%, to $6.3 million in the three months ended June 30, 2025, compared to $4.7 million in the three months ended June 30, 2024. Gross profit decreased by $2.4 million, or 20.4%, to $9.4 million in the three months ended June 30, 2025, compared to $11.8 million in the three months ended June 30, 2024. The decrease in gross profit is primarily attributed to the effects of customer uncertainty about economic stability, tighter third-party lending practices which negatively impacted capital equipment sales, and a decrease in revenue in our international markets driven by the exit from unprofitable direct markets. To a lesser extent, gross profit declines were also impacted by supply disruptions caused by the Israel-Iran conflict impacting production at our contract manufacturer's facility in Israel. Gross margin was 60.1% of revenue in the three months ended June 30, 2025, compared to 71.5% of revenue in the three months ended June 30, 2024. The decrease in gross margin is primarily attributable to the supply disruptions noted above resulting in an adverse sales mix due to shortages of higher margin devices, and to a lesser extent higher device system costs of goods sold tracing to manufacturing overheads spread over a lower volume base.

<u>*Operating expenses*</u>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |  |
|  | **2025** | **2025** | **2024** | **2024** | **Change** |
| **(in thousands, except percentages)** | $**% of Revenues** | **% of Revenues** | $**% of Revenues** | **% of Revenues** | **%** |
| Operating expenses: |  |  |  |  |  |
| Selling and marketing |  | 49.0 |  | 42.5 | 9.0 |
| &nbsp;&nbsp;&nbsp; General and administrative | 60.1 | 60.1 |  | 52.2 | 8.9 |
| &nbsp;&nbsp;&nbsp; Research and development | 8.6 | 8.6 |  | 10.5 | (22.0) |
| Total operating expenses | 117.7 | 117.7 |  | 105.2 | 5.9 |

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<u>*Selling and Marketing*</u>

Selling and marketing expenses increased by $0.6 million or 9.0% in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This increase is largely due to higher sales commissions and increased sales and marketing activities in the U.S. market, designed to counter increased competitor activity. As a percentage of total revenues, our selling and marketing expenses increased by 6.5%, from 42.5% in the three months ended June 30, 2024 to 49.0% in the three months ended June 30, 2025. As the business environment improves, we expect sales and marketing expenses to increase in absolute terms, but at a rate slightly below our rate of revenue growth.

<u>*General and Administrative*</u>

General and administrative expenses increased by $0.8 million or 8.9% in the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to higher bad debt expense and inflationary pressures associated with salaries and other cost elements, partially offset by savings from exiting certain unprofitable direct markets, lower restructuring costs, and proceeds received from previously filed ERC claims. As a percentage of total revenues, our general and administrative expenses increased by 7.9%, from 52.2% in the three months ended June 30, 2024, to 60.1% in the three months ended June 30, 2025, primarily due to the decrease in year over year total revenues.

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<u>*Research and Development*</u>

Research and development expenses decreased by $0.4 million or 22.0% in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. We experienced cost savings through the consolidation of activities between our Israel and United States sites, partially offset by investment in research and development efforts directed at new product initiatives. As a percentage of total revenues, our research and development expenses decreased by 1.9%, from 10.5% in the three months ended June 30, 2024, to 8.6% in the three months ended June 30, 2025.

<u>*Foreign Exchange (Gain) Loss*</u>

We had $0.5 million of foreign exchange gain in the three months ended June 30, 2025 compared to a foreign exchange loss of $0.8 million in the three months ended June 30, 2024, for a favorable variance of $1.3 million year over year. Changes in foreign exchange are driven mainly by the effect of foreign exchange on accounts receivable balances denominated in currencies other than the U.S. dollar. We do not currently hedge against foreign currency risk.

<u>*Finance Expenses*</u>

Finance expenses decreased by $1.3 million or 52.4%, from $2.5 million in the three months ended June 30, 2024, compared to $1.2 million for the three months ended June 30, 2025, primarily due to lower debt levels year over year and interest income received on previously filed ERC claims.

<u>*Income Tax Expense*</u>

We had an income tax expense of $0.2 million in the three months ended June 30, 2025 compared to a $0.1 million income tax expense in the three months ended June 30, 2024. The tax provision is driven by profitable sales and the actual effective tax rates where the sale took place or losses were incurred. In 2025, we had changes in timing of deductible expenses, tax accrual reversals and recognized tax losses in specific judications, which resulted in $0.2 million of income tax expense.

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***Comparison of the six months ended June 30, 2025 and 2024***<br>

*Revenues*

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |  |
|  | **2025** | **2025** | **2024** | **2024** | **Change** |
| **(in thousands, except percentages)** | $**% of Total** | **% of Total** | $**% of Total** | **% of Total** | **%** |
| Revenues: |  |  |  |  |  |
| Venus Prime / Subscription—Systems |  | 25.0 |  | 23.6 | (8.9) |
| Products—Systems |  | 54.0 |  | 56.2 | (17.2) |
| Products—Other |  | 16.6 |  | 15.3 | (6.5) |
| Services |  | 4.4 |  | 4.9 | (23.0) |
| Total |  | 100.0 |  | 100.0 | (13.9) |

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Total revenue decreased by $4.7 million, or 13.9%, to $29.3 million for the six months ended June 30, 2025 from $34.1 million for the six months ended June 30, 2024. The decrease in revenue is primarily attributed to the effects of customer uncertainty about economic stability, tighter third-party lending practices which negatively impacted capital equipment sales and the exiting of unprofitable direct markets. 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. This revenue decline is the primary reason driving cash used in operations $7.5 million higher than the same period in 2024.

We sold an aggregate of 432 systems in the six months ended June 30, 2025 compared to 536 systems in the six months ended June 30, 2024. The percentage of systems revenue derived from our internal lease programs was approximately 32% and 30% during the six months ended June 30, 2025 and 2024, respectively. The continuing low percentage is in line with our strategy to prioritize cash deals over internal financing program deals in order to improve cash generation and preserve liquidity. Specific to the U.S. market, systems revenue derived from our internal lease programs was approximately 28% and 33% during the six months ended June 30, 2025 and 2024, respectively. The Company remains steadfast in ensuring that its in-house financing program accepts only qualified customers with the goal to reduce future credit losses, often at the expense of topline revenue.

Other product revenue was $4.9 million in the six months ended June 30, 2025 a 6.5% decrease compared to product revenue of $5.2 million in the six months ended June 30, 2024.

Services revenue was $1.3 million in the six months ended June 30, 2025, compared to $1.7 million in the six months ended June 30, 2024. The decrease is primarily due to the overall decline in device sales.

<u>*Cost of Goods Sold and Gross Profit*</u>

Cost of goods sold increased by $0.6 million, or 5.5%, to $11.1 million in the six months ended June 30, 2025, compared to $10.6 million in the six months ended June 30, 2024. Gross profit decreased by $5.3 million, or 22.6%, to $18.2 million in the six months ended June 30, 2025, compared to $23.5 million in the six months ended June 30, 2024. The decrease in gross profit is primarily attributed to the effects of customer uncertainty about economic stability, tighter third party lending practices which negatively impacted capital equipment sales, and a decrease in revenue in our international markets driven by the exit from unprofitable direct markets. To a lesser extent, gross profit declines were also impacted by supply disruptions caused by the Israel-Iran conflict impacting production at our contract manufacturer's facility in Israel. Gross margin was 62.0% of revenue in the six months ended June 30, 2025, compared to 69.0% of revenue in the six months ended June 30, 2024. The decrease in gross margin is primarily attributable to the supply disruptions noted above resulting in adverse sales mix due to shortages of higher margin devices, and to a lesser extent higher device system costs of goods sold tracing to manufacturing overheads spread over a lower volume base.

<u>*Operating expenses*</u>

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |  |
|  | **2025** | **2025** | **2024** | **2024** | **Change** |
| **(in thousands, except percentages)** | $**% of Revenues** | **% of Revenues** | $**% of Revenues** | **% of Revenues** | **%** |
| Operating expenses: |  |  |  |  |  |
| Selling and marketing |  | 50.0 |  | 42.3 | 1.8 |
| General and administrative |  | 65.3 |  | 55.5 | 1.4 |
| Research and development |  | 9.9 |  | 10.3 | (17.4) |
| Total operating expenses |  | 125.3 |  | 108.2 | (0.3) |

---

<u>*Selling and Marketing*</u>

Selling and marketing expenses increased by $0.3 million or 1.8% in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase is largely due to higher sales commissions and increased sales and marketing activities in the U.S market, designed to counter increased competitor activity. As a percentage of total revenues, our selling and marketing expenses increased by 7.7%, from 42.3% in the six months ended June 30, 2024 to 50.0% in the six months ended June 30, 2025. As the business environment improves, we expect sales and marketing expenses to increase in absolute terms, but at a rate slightly below our rate of revenue growth.

<u>*General and Administrative*</u>

General and administrative expenses increased by $0.3 million or 1.4% in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to higher bad debt expense and inflationary pressures associated with salaries and other cost elements, partially offset by savings from exiting certain unprofitable direct markets, lower restructuring costs and proceeds received from previously filed ERC claims. As a percentage of total revenues, our general and administrative expenses increased by 9.8%, from 55.5% in the six months ended June 30, 2024, to 65.3% in the six months ended June 30, 2025, primarily due to the decrease in year over year total revenues.

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<u>*Research and Development*</u>

Research and development expenses decreased by $0.6 million or 17.4% in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. We experienced cost savings through the consolidation of activities between our Israel and United States sites, partially offset by investment in research and development efforts directed at new product initiatives. As a percentage of total revenues, our research and development expenses decreased by 0.4%, from 10.3% in the six months ended June 30, 2024, to 9.9% in the six months ended June 30, 2025.

<u>*Foreign Exchange (Gain) Loss*</u>

We had $0.7 million of foreign exchange gain in the six months ended June 30, 2025 compared to a foreign exchange loss of $1.1 million in the six months ended June 30, 2024, a favorable variance of $1.8 million year over year. Changes in foreign exchange are driven mainly by the effect of foreign exchange on accounts receivable balances denominated in currencies other than the U.S. dollar. We do not currently hedge against foreign currency risk.

<u>*Finance Expenses*</u>

Finance expenses decreased by $1.4 million or 33.6%, from $4.1 million in the six months ended June 30, 2024, compared to $2.7 million for the six months ended June 30, 2025, primarily due to significantly lower debt levels year over year.

<u>*Income Tax Expense*</u>

We had an income tax expense of $0.6 million in the six months ended June 30, 2025 compared to a $0.2 million income tax expense in the six months ended June 30, 2024. The tax provision is driven by profitable sales and the actual effective tax rates where the sale took place or losses were incurred. In 2025, we had changes in timing of deductible expenses, tax accrual reversals and recognized tax losses in specific judications, which resulted in $0.6 million of income tax expense.

**Liquidity and Capital Resources**

We had $4.9 million and $4.3 million of cash, cash equivalents, and restricted cash as of June 30, 2025, and December 31, 2024, respectively. We have funded our operations with cash generated from operating activities, through the sale of equity securities and through debt financing. We had total debt obligations of approximately $34.3 million as of June 30, 2025, including the MSLP Loan of $2.8 million, convertible notes of $13.0 million, and a note payable (bridge financing) of $18.4 million compared to total debt obligations of approximately $39.7 million as of December 31, 2024. Cash used in operating activities during the six months ended June 30, 2025 was $11.7 million, representing a $7.5 million increase compared to the six months ended June 30, 2024. Working capital is primarily impacted by the ratio of our internal lease program sales (Venus Prime sales and legacy subscription-based sales) to traditional cash sales. Our shift to prioritize traditional cash sales over internal lease program sales is designed to improve liquidity and reduce working capital requirements over time. Our expanding product portfolio may require higher inventory levels to meet demand and to accommodate the increased number of technology platforms offered. We had a split of lease program revenue to traditional sales revenue at a ratio of approximately 32:68 in the six months ended June 30, 2025, compared to 30:70 in the six months ended June 30, 2024. We expect the ratio of lease program sales to traditional sales for the balance of 2025 and beyond to approximate a 30:70 split. We expect inventory to remain relatively flat in the short term but increase at a lower rate than the rate of revenue growth over the longer term.

We also require modest funding for capital expenditures. Our capital expenditures relate primarily to our research and development facilities in Yokneam, Israel and San Jose, California. In addition, our capital investments have included improvements and expansion of our subsidiaries' operations to support our growth, but do not expect to incur such costs over the next twelve months.

***Issuance of Secured Subordinated Convertible Notes***

Contemporaneously with the MSLP Loan Agreement, on December 9, 2020, we issued $26.7 million aggregate principal amount of the Notes to the Madryn Noteholders pursuant to the terms of the Exchange Agreement. The Notes accrued interest at a rate of 8.0% per annum from the date of original issuance of the Notes to the third anniversary date of the original issuance and thereafter interest accrued at a rate of 6.0% per annum. In connection with the Exchange Agreement, we also entered into (i) the Madryn Loan and Security Agreement, pursuant to which we agreed to grant Madryn a security interest, in substantially all of our assets, to secure the obligations under the Notes and (ii) the CNB Subordination Agreement. The Notes were convertible at any time into shares of our common stock at an initial conversion price of $536.25 per share, subject to adjustment. For additional information regarding the Notes, Exchange Agreement, Madryn Loan and Security Agreement and CNB Subordination Agreement, see Note 11 "Madryn Long-Term Debt and Convertible Notes" to our consolidated financial statements included elsewhere in this report.

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 million in the New Notes, and (ii) 248,755 shares of Series X Convertible Preferred Stock. The New Notes accrued interest, payable in kind on a quarterly basis, at an annual rate of 90-day Adjusted SOFR + 8.5% and are convertible at any time into shares of our common stock at an initial conversion price of $264 per share, subject to adjustment. On March 31, 2025, the Company entered into the 2025 Exchange Agreement, pursuant to which the Madryn Noteholders agreed to exchange $28.0 million in aggregate principal amount outstanding under the New Notes for (i)$17.0 million in New Secured Notes and (ii) 379,311 shares of Series Y Preferred Stock. The New Secured Notes follow the same terms as the previous New Notes. On June 30, 2025, the Company entered into the June 2025 Exchange Agreement, pursuant to which the Madryn Noteholders agreed to exchange $17.0 million 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 $11.1 million, and (b) 325,651 shares of Series Y Preferred Stock. The New Madryn Notes follow the same terms as the previous New Secured Notes.

***Main Street Priority Lending Program Term Loan***

On December 8, 2020, we executed the MSLP Loan Agreement, MSLP Note, and related documents for a loan in the aggregate amount of $50.0 million for which 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. On October 4, 2023, the Company, Venus USA, Venus Canada, and Venus Ltd. entered into the MSLP Loan Modification, which modified certain terms of the MSLP Loan Agreement. 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 Lenders agreed to exchange $52.1 million in aggregate principal amount outstanding for $17.1 million in aggregate principal amount of new secured notes and 576,986 shares of newly-created Series Y Preferred Stock. On September 26, 2024, the Lenders agreed to another exchange of $17.7 million in aggregate principal amount outstanding for $2.7 million in aggregate principal of remaining secured notes and 203,583 shares of Series Y Preferred Stock. From June 21, 2024 through September 26, 2024, the Company entered into multiple Amendment and Consent Agreements with Madryn to, among other things, modify interest payments to be payable-in-kind, grant relief from the Minimum Deposit Relationship obligations and minimum liquidity requirements, and delete the net loss covenant. See Note 11 *"Madryn Debt and Convertible Notes"* to our condensed consolidated financial statements included elsewhere in this report.

***EW Convertible Note***

On January 18, 2024, the Company, Venus USA, Venus Canada and Venus Ltd. entered into the Note Purchase Agreement with the EW Investors. Pursuant to the Note Purchase Agreement, the Company issued and sold to the EW Investors $2.0 million aggregate principal value of 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. In connection with the Note Purchase Agreement, the Company entered into the EW Security Agreement pursuant to which, the Company granted to the EW Investors a security interest in substantially all of their assets to secure the obligations under the 2024 Notes. The 2024 Notes were convertible at any time into shares of our common stock at an initial conversion price of $13.761 per share, subject to adjustment.

For additional information regarding the 2024 Notes, Note Purchase Agreement, and EW Security Agreement, see Note 12 "*EW Convertible Notes*" to our condensed consolidated financial statements included elsewhere in this report.

***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 $21.0 million. The transaction is discussed in Note 11 *"Madryn Debt and Convertible Notes"* in the notes to our condensed consolidated financial statements included elsewhere in this report.

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***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 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 we could sell to Lincoln Park under the Equity Purchase Agreement may in no case exceed the Exchange Cap, unless (i) stockholder approval was obtained to issue shares above the Exchange Cap, in which case the Exchange Cap would no longer apply, or (ii) the average price of all applicable sales of common stock to Lincoln Park under the Equity Purchase Agreement equaled or exceeded $59.6325 per share (subject to adjustment) (which represents the minimum price, as defined under 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 Listing Rules). Also, at no time could Lincoln Park (together with its affiliates) beneficially own more than 9.99% of our issued and outstanding common stock. Concurrently with entering into the Equity Purchase Agreement, we also entered into a Registration Rights Agreement with Lincoln Park. 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. Through December 31, 2023 we issued an additional 70.6 thousand shares of common stock to Lincoln Park at an average price of $43.67 per share. During the twelve months 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. For additional information regarding the 2022 LPC Purchase Agreement, see Note 14 "*Stockholders' Equity*" to our condensed consolidated financial statements included elsewhere in this report.

***The 2022 Private Placement***

On November 18, 2022, we consummated the 2022 Private Placement whereby 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 and 3,185,000 shares of our Voting Preferred Stock. 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 (deficit). The accounting effects of the 2022 Private Placement transaction are discussed in Note 14 "*Stockholders' Equity*" in the notes to our consolidated financial statements included elsewhere in this report.

***The 2023 Multi-Tranche Private Placement***

In May 2023, we 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 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 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 expects to use 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 transactions are 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, warrants to acquire up to an aggregate of 74,342 shares of common stock, at an initial exercise price of $14.74 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 Offering, (iii) reimbursement of certain expenses and (iv) warrants to acquire up to an aggregate of 5,204 shares of common stock (the "Placement Agent Warrants"). The Placement Agent Warrants are substantially similar to the 2024 Investor Warrants, except that the initial exercise price of the Placement Agent Warrants is $20.1438 per share.

On April 9, 2025, the Company entered into the April 9 SPA with 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 the April 11 SPA 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 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) 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 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.

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 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, an aggregate of 869,440 warrants (the "2025 Investor Warrants"), at an initial exercise price of $2.65 per share. 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, and in certain circumstances may be exercised on a cashless basis. 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 30,430 shares of Common Stock (the "Placement Agent Warrants"). The Placement Agent Warrants are substantially similar to the Investor Warrants, except that the initial exercise price of the 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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***Capital Resources***

As of June 30, 2025, we had capital resources consisting of cash, cash equivalents, and restricted cash of $4.9 million. We have financed our operations principally through the issuance and sale of our common stock and preferred stock, debt financing, and payments from customers.

We believe that the net proceeds from the Madryn Loan and Security Agreement, the Registered Direct Offering, the 2024 Note, the 2023 Multi-Tranche Private Placement, the 2022 Private Placement, the proceeds from issuance of our common stock to Lincoln Park, the proceeds from the MSLP Loan, the Short-Term Bridge Financing by Madryn, our strategic cash flow enhancement initiatives, our initiatives to pursue strategic alternatives, together with our existing cash, cash equivalents, and restricted cash will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We can provide no assurances that we will be successful in raising additional capital or that such capital, if available at all, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to reduce the scope of our operations and planned capital or research and development expenditures or sell certain assets, including intellectual property assets.

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to:

• delay or curtail our efforts to develop system product enhancements or new products, including any clinical trials that may be required to market such enhancements;

• delay or curtail our plans to increase and expand our sales and marketing efforts; or

• delay or curtail our plans to enhance our customer support and marketing activities.

We are restricted by covenants in the MSLP Loan, EW Security Agreement, and the Madryn Loan and Security Agreement. These covenants restrict, among other things, our ability to incur additional indebtedness, which may limit our ability to obtain additional debt financing. In the event that the current macroeconomic headwinds continue to cause or present disruptions for an extended period of time, we cannot assure you that we will remain in compliance with the financial covenants contained in our credit facilities. We also cannot assure you that our lenders would provide relief or that we could secure alternative financing on favorable terms, if at all. Our failure to comply with the covenants contained in our credit facilities, including financial covenants, could result in an event of default, which could materially and adversely affect our results of operations and financial condition.

We have based our projections on the amount of time through which our financial resources will be adequate to support our operations on assumptions that may prove to be incorrect, and we may use all our available capital resources sooner than we expect. Our future funding requirements, including long-term funding requirements, will depend on many factors, including, but not limited to:

• the cost of growing our ongoing commercialization and sales and marketing activities;

• the costs of manufacturing and maintaining enough inventories of our systems to meet anticipated demand and inventory write-offs related to obsolete products or components;

• the costs of enhancing the existing functionality and development of new functionalities for our systems;

• the costs of preparing, filing, prosecuting, defending, and enforcing patent claims and other patent related costs, including litigation costs and the results of such litigation;

• any product liability or other lawsuits and the costs associated with defending them or the results of such lawsuits;

• the costs associated with conducting business and maintaining subsidiaries and other entities in foreign jurisdictions;

• customers in jurisdictions where our systems are not approved delaying their purchase, and not purchasing our systems, until they are approved or cleared for use in their market;

• the costs to attract and retain personnel with the skills required for effective operations; and

• the costs associated with being a public company.

In order to grow our business and increase revenues, we will need to introduce and commercialize new products, grow our sales and marketing force, implement new software systems, as well as identify and penetrate new markets. Such endeavors have in the past increased, and may continue in the future, to increase our expenses, including sales and marketing, and research and development. We will have to continue to increase our revenues while effectively managing our expenses in order to achieve profitability and to sustain it. Our failure to control expenses could make it difficult to achieve profitability or to sustain profitability in the future. Moreover, we cannot be sure that our expenditures will result in the successful development and introduction of new products in a cost-effective and timely manner or that any such new products will achieve market acceptance and generate revenues for our business.

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***Cash flows***

The following table summarizes our cash flows for the periods indicated:

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| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(in thousands)** | **(in thousands)** |
| Cash used in operating activities | $(11758) | $(4210) |
| Cash used in investing activities | (197) | (47) |
| Cash provided by financing activities | 12549 | 4593 |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | $594 | $336 |

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<u>*Cash Flows from Operating Activities*</u>

For the six months ended June 30, 2025, cash used in operating activities consisted of a net loss of $24.1 million, partially offset by non-cash operating expenses of $11.6 million and a decrease in net operating assets of $0.7 million. The decreased use of cash in net operating assets was primarily attributable to an increase in accrued expenses and other current liabilities of $1.4 million, and a decrease in inventory of $0.8 million. These were partially offset primarily by an increase in other current assets of $0.5 million, and a decrease in trade payables of $0.6 million. The non-cash operating expenses primarily consisted of depreciation and amortization of $1.9 million, provision for expected credit losses of $2.3 million, a loss on extinguishment of debt of $2.9 million, provision for inventory obsolescence of $0.9 million, and finance expenses and accretion of $2.7 million.

For the six months ended June 30, 2024, cash used in operating activities consisted of a net loss of $29.7 million, partially offset by decreases in net operating assets of $8.5 million and non-cash operating expenses of $17.0 million. The use of cash in net operating assets was attributable to a decrease in accounts receivable of $6.0 million, a decrease in inventories of $2.6 million, and a decrease in advances to suppliers of $1.1 million. These were offset by a decrease in trade payables of $1.6 million, a decrease of unearned interest income of $0.5 million, and a decrease in long-term operating lease liabilities of $0.5 million. The non-cash operating expenses consisted of a loss on extinguishment of debt of $10.9 million, depreciation and amortization of $2.0 million, stock-based compensation expense of $0.6 million, provision for inventory obsolescence of $0.7 million, finance expenses and accretion of $2.5 million, and provision for expected credit losses of $0.4 million.

<u>*Cash Flows from Investing Activities*</u>

In the six months ended June 30, 2025, cash used in investing activities consisted of $0.2 million for the purchase of property and equipment.

In the six months ended June 30, 2024, cash used in investing activities consisted of $0.1 million for the purchase of property and equipment.

<u>*Cash Flows from Financing Activities*</u>

In the six months ended June 30, 2025, cash provided by financing activities consisted of net proceeds from the short-term bridge financing by Madryn of $9.3 million and net proceeds from the Registered Direct Offering of shares and warrants of $3.3 million.

In the six months ended June 30, 2024, cash provided by financing activities primarily consisted of net proceeds from the Registered Direct Offering of shares and warrants of $1.0 million, net proceeds from the 2024 Convertible Notes issued to EW of $1.6 million, and proceeds from the short-term bridge financing by Madryn of $2.0 million.

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***Contractual Obligations and Other Commitments***

Our premises and those of our subsidiaries are leased under various operating lease agreements, which expire on various dates.

As of June 30, 2025, we had non-cancellable purchase orders placed with our contract manufacturers in the amount of $13.1 million. In addition, as of June 30, 2025, we had $0.4 million of open purchase orders that can be cancelled with 270 days' notice.

The following table summarizes our contractual obligations as of June 30, 2025, which represent material expected or contractually committed future obligations.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** | **Payments Due by Period** |
|  | **Less than 1 Year** | **2 to 3 Years** | **4 to 5 Years** | **More than 5 Years** | **Total** |
|  | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** | ***(in thousands)*** |
| Debt obligations, including interest | $18983 | $19395 | $— | $— | $38378 |
| Operating leases | 1238 | 1218 | 192 | 128 | 2776 |
| Purchase commitments | 13016 | 47 |  |  | 13063 |
| Total contractual obligations | $33237 | $20660 | $192 | $128 | $54217 |

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For an additional description of our commitments see Note 9, "*Commitments and Contingencies*" to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

**Off-Balance Sheet Arrangements**

We do not currently engage in off-balance sheet financing arrangements. In addition, we do not have any interest in entities referred to as variable interest entities, which includes special purpose entities and other structured finance entities.

**Critical Accounting Policies and Estimates**

Our condensed consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and related disclosures. These estimates form the basis for judgments we make about the carrying values of our assets and liabilities, which are not readily apparent from other sources. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies are more fully described in Note 2 to the audited consolidated financial statements included in our Annual Report filed on Form 10-K for the year ended December 31, 2024. We believe that the assumptions and estimates associated with revenue recognition, long-term receivables, allowance for expected credit losses, warranty accrual, and stock-based compensation have the most significant impact on our consolidated financial statements, and therefore, we consider these to be our critical accounting policies and estimates.

***Revenue Recognition***

We generate revenue from (1) sales of systems through our internal lease programs, in accordance with ASC 842, "Leases" ("ASC 842"), traditional system sales to customers and distributors, (2) other product revenues from the sale of ARTAS procedure kits, marketing supplies and kits, consumables and (3) our extended warranty service contracts provided to existing customers.

We recognize revenues on other products and services in accordance with ASC 606, "Revenue from Contracts with Customers" ("ASC 606"). Revenue is recognized 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.

We record our revenue net of sales tax and shipping and handling costs.

***Long-term receivables***

Long-term receivables relate to our internal lease programs revenue or contracts which stipulate payment terms which exceed one year. They are comprised of the unpaid principal balance, net of the allowance for expected credit losses. These receivables have been discounted based on the implicit interest rate in the subscription lease which range between 8% and 10% for the six months ended June 30, 2025 and 8% and 10% for the six months ended June 30, 2024. Unearned interest revenue represents the interest only portion of the respective lease program payments and will be recognized in income over the respective payment term as it is earned.

***Allowance for expected credit losses***

The allowance for expected credit losses is based on our assessment of the collectability of customer accounts and the aging of the related invoices and represents our best estimate of probable credit losses in our existing trade accounts receivable. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the account receivable balances, and current economic conditions that may affect a customer's ability to pay.

***Warranty accrual***

We generally offer a one year warranty for all our systems against defects. The warranty period begins upon shipment and we record a liability for accrued warranty costs at the time of sale of a system, which consists of the remaining warranty on systems sold based on historical warranty costs and management's estimates. We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts thereof as necessary. We exercise judgment in estimating expected system warranty costs. If actual system failure rates, freight, material, technical support and labor costs differ from our estimates, we will be required to revise our estimated warranty liability. To date, our warranty reserve has been sufficient to satisfy warranty claims paid.

***Stock-Based Compensation***

We account for stock-based compensation costs in accordance with the accounting standards for stock-based compensation, which require that all stock based payments to employees be recognized in the condensed consolidated statements of operations based on their fair values.

The fair value of stock options on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option's expected term and the price volatility of the underlying stock, to determine the fair value of the award. We recognize the expense associated with options using a single-award approach over the requisite service period.

***Financial statements in U.S. dollars***

We believe that the U.S. dollar is the currency in the primary economic environment in which we operate. The U.S. dollar is the most significant currency in which our revenues are generated, and our costs are incurred. In addition, our debt and equity financings are generally based in U.S. dollars. Therefore, our functional currency, and that of our subsidiaries, is the U.S. dollar.

Transactions and balances originally denominated in U.S. dollars are presented at their original amounts. Non-dollar transactions and balances are re-measured into U.S. dollars in accordance with the principles set forth in ASC 830-10 "Foreign Currency Translation." All exchange gains and losses from re-measurement of monetary balance sheet items resulting from transactions in non-U.S. dollar currencies are recorded as foreign exchange (gain) loss in the condensed consolidated statement of operations as they arise.

**Recent Accounting Pronouncements**

See Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the date of this Quarterly Report on Form 10-Q.

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**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

As a smaller reporting company, we are not required to provide disclosure for this Item.

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of disclosure controls and procedures**

As of June 30, 2025, our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.

We have performed an evaluation of the effectiveness of our internal control over financial reporting, based on criteria established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its 2013 Internal Control-Integrated Framework. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal controls over financial reporting were effective as of June 30, 2025.

**Limitations on Effectiveness of Controls and Procedures**

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Because of these limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become ineffective because of changes in conditions or that the degree of compliance with established policies or procedures may deteriorate.

**Changes in Internal Control over Financial Reporting**

There were no material changes in our internal control over financial reporting during the three and six months ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

This Quarterly Report on Form 10-Q does not include an attestation report of our registered public accounting firm because the Company is not an "accelerated filer" or a "large accelerated filer."

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 41

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[**Table of Contents**](#toc)

**PART II OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

As of June 30, 2025, the Company was not a party to any material active or pending legal proceedings.

We may from time to time continue to be involved in various legal proceedings of a character normally incident to the ordinary course of our business.

**ITEM 1A. RISK FACTORS** 

*Our operations and financial results are subject to various risk and uncertainties, including those described below and the risk factors described under Part I, Item 1A.* "*Risk Factors*" *in our latest Form 10-K for the year ended December 31, 2024, any of which could adversely affect our business, results of operations, financial condition and prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations. You should carefully consider the risks described below and the other information in this Quarterly Report on Form 10-Q, our unaudited condensed consolidated financial statements, and the related notes thereto, and* "*Management*'*s Discussion and Analysis of Financial Condition and Results of Operations*"*, included herein, and the risk factors previously disclosed in Part I, Item 1A.* "*Risk Factors*" *in our Form 10-K for the year ended December 31, 2024 filed with the SEC and incorporated by reference herein.*

***Conditions in the Middle East, including the October 2023 attack by Hamas and other terrorist organizations on Israel and Israel***'***s war against them, and Israel's recent conflict with Iran, may adversely affect our operations and limit our ability to manage and market our products, which could lead to a decrease in revenues.***

Certain of our operations are conducted in Israel and a number of our employees, contract manufacturers and consultants, including employees of our service providers, are located in Israel. As such, our business and operations may be directly affected by economic, political, geopolitical and military conditions affecting Israel.

On October 7, 2023, Hamas militants and members of other terrorist organizations infiltrated Israel's southern border from the Gaza Strip and conducted a series of terror attacks on civilian and military targets. Thereafter, these terrorists launched extensive rocket attacks on the Israeli population and industrial centers located along the Israeli border with the Gaza Strip. Shortly following the attack, Israel's security cabinet declared war against Hamas. While an initial armistice and hostages/prisoners exchange was agreed to by Israel and Hamas and came into effect on January 19, 2025, the war has since resumed.

Further, 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 intensity, duration and impact of Israel's current wars against Hamas and Iran and the corresponding geopolitical instability in the region is difficult to predict, as are the war's economic implications on the Company's business and operations.

Additionally, political uprisings, social unrest and violence in various other countries in the Middle East, including Israel's neighboring countries Syria, Lebanon, Egypt and Jordan, are affecting the political stability of those countries. This instability may lead to deterioration of the political relationships that exist between Israel and certain countries and have raised concerns regarding security in the region and the potential for armed conflict. Iran is also believed to have a strong influence over various proxy militias across the Middle East, and among the Syrian government, Hamas and Hezbollah, in addition to its readiness to engage in conflict with Israel directly. These situations may potentially escalate in the future into more violent events which may affect Israel and us. These situations, including conflicts which involved missile strikes against civilian and military targets in various parts of Israel may negatively impact the Company's operations in Israel.

Our facilities are within the range of rockets that have been launched from surrounding territories, though none of our operations or those of our manufacturers have been impacted to date. In the event that our facilities in Israel, or the facilities of our vendors in Israel, are damaged as a result of the hostilities or hostilities otherwise disrupt the ongoing operation of our facilities, our ability to deliver products to customers in a timely manner to meet our contractual obligations with customers and vendors could be materially and adversely affected. Any losses or damages incurred by us could have a material adverse effect on our business.

Our insurance does not cover losses that may occur as a result of an event associated with the security situation in the Middle East or for any resulting disruption in our operations. Although the Israeli government has in the past covered the reinstatement value of direct damages that were caused by terrorist attacks or acts of war, we cannot be assured that this government coverage will be maintained or, if maintained, will be sufficient to compensate us fully for damages incurred and the government may cease providing such coverage or the coverage might not suffice to cover potential damages. Any losses or damages incurred by us could have a material adverse effect on our business.

***We offer credit terms to some qualified customers and distributors. In the event that a customer or distributor defaults on the amounts payable to us, our financial results may be adversely affected.***

For the six months ended June 30, 2025 and 2024, approximately 32% and 30% of our total system revenues were derived from our internal lease programs (Venus Prime and our legacy subscription-based model), respectively. Under our internal lease programs, we collect an up-front fee, combined with 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. For accounting purposes, these arrangements are considered to be sales-type finance leases, where the present value of all cash flows to be received under the Venus Prime or subscription agreement is recognized as revenue upon shipment of the system to the customer. We cannot provide any assurance that the financial position of customers purchasing products and services under a Venus Prime or subscription agreement will not change adversely before we receive all the monthly installment payments due under the contract. In the event that there is a default by any of the customers to whom we have sold systems under our internal lease programs (Venus Prime or our legacy subscription-based model), we may recognize bad debt expenses in our general and administrative expenses. If the extent of such defaults is material, it could negatively affect our results of operations and operating cash flows.

In addition to our internal lease programs, we generally offer credit terms of 30 to 90 days to qualified customers and distributors. In the event that there is a default by any of the customers or distributors to whom we have provided credit terms, we may recognize bad debt expenses in our general and administrative expenses. If the extent of such defaults is material, it could negatively affect our future results of operations and cash flows.

We may also be adversely affected by bankruptcies or other business failures of our customers, distributors, and potential customers. A significant delay in the collection of accounts receivable or a reduction of accounts receivables collected may impact our liquidity or result in bad debt expenses.

***We may not be able to maintain our listing on The Nasdaq Capital Market and it may become more difficult to sell our stock in the public market***.

*<u>Minimum Stockholder Equity Requirement</u>*

On May 31, 2023, we received a notice (the "Notice") from Nasdaq stating that our stockholders' equity as reported in our Quarterly Report on Form 10-Q for the period ended March 31, 2023 was below the minimum $2,500,000 required for continued listing under Nasdaq Listing Rule 5550(b)(1) ("Minimum Equity Requirement").

The Notice had no immediate effect on the listing of our common stock. On July 17, 2023, we submitted to Nasdaq a plan to regain compliance with the Minimum Equity Requirement (the "Plan"). On July 28, 2023, Nasdaq granted us an extension until November 27, 2023 to evidence compliance with the Minimum Equity Requirement, conditioned upon our achievement of certain milestones as set forth in the Plan. On November 28, 2023, the Company received a written notice from the Nasdaq Staff which described its determination that the Company had not regained compliance with the Minimum Equity Requirement within the Plan period. As a result, the Nasdaq Staff advised the Company that its securities will be delisted at the opening of business on December 7, 2023, unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the "Panel").

On December 5, 2023, the Company timely requested a hearing before the Panel. The hearing was held on March 5, 2024, staying any delisting pending the issuance of the Panel's decision.

On March 20, 2024, the Company received a decision from the Panel granting its request for continued listing on the Nasdaq Capital Market, subject to the Company demonstrating compliance with Nasdaq Listing Rule 5550(b) on or before May 28, 2024, and certain other conditions.

On June 4, 2024, the Company was formally notified by Nasdaq that the Company had regained compliance with the stockholders' equity Minimum Equity Requirement.

The Company is subject to a "Mandatory Panel Monitor," as defined in Nasdaq Listing Rule 5815(d)(4)(B), through June 4, 2025. If the Company is found to be noncompliant with the Minimum Equity Requirement within the monitoring period, the Company would not be allowed to provide the Nasdaq Listing Qualifications Staff with a plan to regain compliance with the Minimum Equity Requirement; rather, the Nasdaq Listing Qualifications Staff would be required to issue a delist determination. In such case, the Company would have the opportunity to request a new hearing before the Panel, which request would stay any further action by the Nasdaq Listing Qualifications Staff until the time of the hearing.

*<u>Minimum Bid Price Requirement</u>*

On April 11, 2024, the Company received a notice from Nasdaq stating that for 32 consecutive business days the Company's common stock did not maintain a minimum closing bid price of $1.00 per share as required for continued listing under Listing Rule 5550(a)(2).

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or until the Initial Compliance Date, to regain compliance with the Minimum Bid Price Requirement. The Company did not regain compliance with the Bid Price Requirement by the Initial Compliance Date.

On October 17, 2024, Nasdaq notified the Company that it is eligible for an additional 180 calendar day period, or until the Extended Compliance Date, to regain compliance with the Bid Price Requirement. If, at any time before the Extended Compliance Date, the bid price for the Company's common stock closes at $1.00 or more for a minimum of 10 consecutive business days as required under the Compliance Period Rule, the Staff will provide written notification to the Company that it complies with the Bid Price Requirement, unless the Staff exercises its discretion to extend this 10 day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H).

On March 3, 2025, the Company effected the Reverse Stock Split of the Company's issued and outstanding common stock, par value $0.0001 per share by the filing of a Certificate of Amendment of Certificate of Incorporation with the Secretary of State of the State of Delaware pursuant to the Delaware General Corporation Law. The Reverse Stock Split became effective at 5:00 p.m. Eastern Time on March 3, 2025, and began trading on a Reverse Stock Split-adjusted basis as of the opening of the Nasdaq Capital Market on March 4, 2025. On March 18, 2025, the Company received a notice from Nasdaq stating that the Company had regained compliance with the Bid Price Requirement.

If our common stock ultimately is delisted for failure to comply with the Minimum Bid Price or Minimum Equity Requirement, our shareholders could face significant adverse consequences, including:

• Limited availability or market quotations for our common stock;

• Reduced liquidity of our common stock;

• Determination that shares of our common stock are "penny stock," which would require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock;

• Limited amount of news analysts' coverage of us; and

• Decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.

***Changes in trade policies among the United States and other countries, in particular the imposition of new or higher tariffs or retaliatory tariffs, may adversely impact costs related to the production, manufacturing and transportation of our products. Increased tariffs or the imposition of other barriers to international trade could decrease demand and have a negative effect on our revenues and operating results.***

The U.S. Federal administration has imposed or proposed new or higher tariffs on certain products exported by a number of U.S. trading partners, including China, Europe, Canada, and Mexico. In response, many of those trading partners, including China, have imposed or proposed new or higher tariffs on American products. The U.S. Federal administration recently increased tariffs on goods imported from Israel to 10% (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. In addition, the Company derives a meaningful percentage of its revenues from outside of the US, and therefore, these developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may have a material adverse effect on the Company's business and operations. In addition, the Company and/or its contract manufacturers, source component parts used in our products from countries affected by higher tariffs. We also routinely ship our products internationally. An increase in tariffs may adversely affect our gross profit margins in the future due to higher costs of production, manufacturing and transportation of our products and/or impact our ability to sell our product in certain affected international markets.

We also face uncertainty in the interpretation of new tariffs and their applicability, including with respect to customs valuation, product classification and country-of-origin determinations. Although we and our suppliers seek to comply with applicable customs laws and regulations, the application of rules regarding new tariffs can be subject to varying interpretations or future re-interpretations. It is possible that U.S. or other relevant authorities could, upon review or audit, disagree with the valuation, rules of origin or classification methods applied to certain products. We cannot control the duration or depth of such actions which may increase our product costs which would in turn reduce our margins and potentially decrease the competitiveness of our products. These actions could have a negative effect on our business, results of operations, or financial condition.

Furthermore, compliance with export controls and implementation of additional tariffs may increase compliance costs and further affect our business and operating results.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 42

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**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

*Unregistered Sales of Equity Securities*

Except as otherwise disclosed in the Company's Current Reports on Form 8-K filed with the SEC on April 2, 2025, April 11, 2025, April 14, 2025, June 9, 2025, and July 1, 2025 there were no unregistered securities issued and sold during the three months ended June 30, 2025.

*Use of Proceeds*

None.

*Issuer Purchases of Equity Securities* 

None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 43

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[**Table of Contents**](#toc)

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not Applicable.

**ITEM *5.* OTHER INFORMATION**

None.

**ITEM 6. EXHIBITS** 

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Exhibit**<br> **Number** | **Description** | **Form** | **Date** | **Number** | **Filed**<br> **Herewith** |
| 3.1 | [Amended and Restated Certificate of Incorporation of Restoration Robotics, Inc.](http://www.sec.gov/Archives/edgar/data/0001409269/000119312517311810/d448597dex31.htm) | 8-K | 10-17-17 | 3.1 |  |
| 3.2 | [Certificate of Amendment of Certificate of Incorporation of Restoration Robotics, Inc.](http://www.sec.gov/Archives/edgar/data/0001409269/000119312519286952/d827576dex31.htm) | 8-K | 11-7-19 | 3.1 |  |
| 3.3 | [Certificate of Amendment of Certificate of Incorporation of Venus Concept Inc.](http://www.sec.gov/Archives/edgar/data/1409269/000114036123024193/brhc20052761_ex3-1.htm) | 8-K | 5-11-23 | 3.1 |  |
| 3.4 | [Certificate of Amendment to Certificate of Designations of Senior Convertible Preferred Stock.](http://www.sec.gov/Archives/edgar/data/1409269/000114036123031431/brhc20054780_ex3-1.htm) | 8-K | 6-26-23 | 3.1 |  |
| 3.5 | [Certificate of Designations of Series X Convertible Preferred Stock.](http://www.sec.gov/Archives/edgar/data/1409269/000114036123047079/ef20011960_ex3-1.htm) | 8-K | 10-5-23 | 3.1 |  |
| 3.6 | [Certificate of Designations of Series Y Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1409269/000114036124027551/ef20030043_ex3-1.htm) | 8-K | 5-28-24 | 3.1 |  |
| 3.7 | [Second Amended and Restated Bylaws of Venus Concept Inc.](http://www.sec.gov/Archives/edgar/data/0001409269/000119312519286952/d827576dex32.htm) | 8-K | 11-7-19 | 3.2 |  |
| 3.8 | [Amendment to Certificate of Designations of Series Y Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1409269/000114036124042112/ef20036350_ex3-1.htm) | 8-K | 9-27-24 | 3.1 |  |
| 3.9 | [Certificate of Amendment of Series Y Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1409269/000114036125011679/ef20046756_ex3-1.htm) | 8-K | 4-2-25 | 3.1 |  |
| 3.10 | [Certificate of Amendment of Voting Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1409269/000114036125011679/ef20046756_ex3-2.htm) | 8-K | 4-2-25 | 3.2 |  |
| 3.11 | [Certificate of Amendment to Certificate of Designations of Senior Convertible Preferred Stock](http://www.sec.gov/Archives/edgar/data/1409269/000114036125017125/ef20048288_ex3-1.htm) | 8-K | 5-2-25 | 3.1 |  |
| 3.12 | [Certificate of Amendment to Certificate of Designations of Senior Convertible Preferred Stock, dated April 30, 2025.](http://www.sec.gov/Archives/edgar/data/1409269/000114036125017125/ef20048288_ex3-1.htm) | 8-K | 5-2-25 | 3.1 |  |
| 3.13 | [Certificate of Amendment of Series Y Convertible Preferred Stock, dated June 30, 2025](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex3-1.htm) | 8-K | 7-1-25 | 3.1 |  |
| 3.14 | [Certificate of Amendment to Certificate of Designations of Series Y Convertible Preferred Stock dated August 6, 2025](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex3-1.htm) | 8-K | 8-6-25 | 3.1 |  |
| 4.1 | [Form of Investor Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036124009816/ef20022605_ex4-1.htm) | 8-K | 2-27-24 | 4.1 |  |
| 4.2 | [Form of Placement Agent Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036124009816/ef20022605_ex4-2.htm) | 8-K | 2-27-24 | 4.2 |  |
| 4.3 | [Form of Placement Agent Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036125013302/ef20047213_ex4-1.htm) | 8-K | 4-11-25 | 4.1 |  |
| 4.4 | [Form of Placement Agent Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036125013786/ef20047332_ex4-1.htm) | 8-K | 4-14-25 | 4.1 |  |
| 4.5 | [Form of Placement Investor Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021968/ef20050351_ex4-1.htm) | 8-K | 6-9-25 | 4.1 |  |
| 4.6 | [Form of Placement Agent Warrant](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021968/ef20050351_ex4-2.htm) | 8-K | 6-9-25 | 4.2 |  |
| 10.1 | [Form of Securities Purchase Agreement](http://www.sec.gov/Archives/edgar/data/1409269/000114036125013302/ef20047213_ex10-1.htm) | 8-K | 4-11-25 | 10.1 |  |
| 10.2 | [Form of Securities Purchase Agreement](http://www.sec.gov/Archives/edgar/data/1409269/000114036125013786/ef20047332_ex10-1.htm) | 8-K | 4-14-25 | 10.1 |  |
| 10.3 | [Consent Agreement, dated April 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125017125/ef20048288_ex10-1.htm) | 8-K | 5-2-25 | 10.1 |  |
| 10.4 | [Fourteenth Amendment to Bridge Loan Agreement, dated April 30, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125017125/ef20048288_ex10-2.htm) | 8-K | 5-2-25 | 10.2 |  |
| 10.5 | [Consent Agreement, dated April 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125017125/ef20048288_ex10-3.htm) | 8-K | 5-2-25 | 10.3 |  |
| 10.6 | [Consent Agreement, dated May 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021128/ef20050028_ex10-1.htm) | 8-K | 6-2-25 | 10.1 |  |
| 10.7 | [Fifteenth Amendment to Bridge Loan Agreement, dated April 30, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021128/ef20050028_ex10-2.htm) | 8-K | 6-2-25 | 10.2 |  |
| 10.8 | [Consent Agreement, dated May 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021128/ef20050028_ex10-3.htm) | 8-K | 6-2-25 | 10.3 |  |
| 10.9 | [Unit Purchase Agreement dated June 5, 2025 by and among Venus Concept Inc., Meta Robotics LLC and MHG Co., Ltd.](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021814/ef20050322_ex10-1.htm) | 8-K | 6-6-25 | 10.1 |  |
| 10.10 | [Form of Securities Purchase Agreement](http://www.sec.gov/Archives/edgar/data/1409269/000114036125021968/ef20050351_ex10-1.htm) | 8-K | 6-9-25 | 10.1 |  |
| 10.11 | [Exchange Agreement, dated June 30, 2025, by and among Venus Concept Inc., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-1.htm) | 8-K | 7-1-25 | 10.1 |  |
| 10.12 | [Secured Subordinated Convertible Note, dated June 30, 2025, issued by Venus Concept Inc. in favor of Madryn Health Partners, LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-2.htm) | 8-K | 7-1-25 | 10.2 |  |
| 10.13 | [Secured Subordinated Convertible Note, dated June 30, 2025, issued by Venus Concept Inc. in favor of Madryn Health Partners (CaymanMaster), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-3.htm) | 8-K | 7-1-25 | 10.3 |  |
| 10.14 | [Third Amended and Restated Registration Rights Agreement, dated June 30, 2025, by and among Venus Concept Inc., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-4.htm) | 8-K | 7-1-25 | 10.4 |  |
| 10.15 | [Consent Agreement, dated June 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-5.htm) | 8-K | 7-1-25 | 10.5 |  |
| 10.16 | [Sixteenth Amendment to Bridge Loan Agreement, dated June 30, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-6.htm) | 8-K | 7-1-25 | 10.6 |  |
| 10.17 | [Consent Agreement, dated June 30, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125024385/ef20051445_ex10-7.htm) | 8-K | 7-1-25 | 10.7 |  |
| 10.18 | [Consent Agreement, dated July 31, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex10-1.htm) | 8-K | 8-6-25 | 10.1 |  |
| 10.19 | [Seventeenth Amendment to Bridge Loan Agreement, dated July 31, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex10-2.htm) | 8-K | 8-6-25 | 10.2 |  |
| 10.20 | [Consent Agreement, dated July 31, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex10-3.htm) | 8-K | 8-6-25 | 10.3 |  |
| 10.21 | [Eighteenth Amendment to Bridge Loan Agreement, dated August 6, 2025, by and among Venus Concept USA, Inc., Venus Concept Inc., Venus Concept Canada Corp., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125030311/ef20053672_ex10-4.htm) | 8-K/A | 8-12-25 | 10.4 |  |
| 10.22 | [Consent Agreement, dated August 6, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex10-5.htm) | 8-K | 8-6-25 | 10.5 |  |
| 10.23 | [Consent Agreement, dated August 6, 2025, by and among Venus Concept Inc., Venus Concept Canada Corp., Venus Concept USA Inc., Venus Concept Ltd., Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP](http://www.sec.gov/Archives/edgar/data/1409269/000114036125029163/ef20053308_ex10-6.htm) | 8-K | 8-6-25 | 10.6 |  |
| 31.1 | [Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex_823243.htm) |  |  |  | X |
| 31.2 | [Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](ex_823244.htm) |  |  |  | X |
| 32.1\* | [Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex_823245.htm) |  |  |  | X |
| 32.2\* | [Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.](ex_823246.htm) |  |  |  | X |
| 101.INS | Inline XBRL Instance Document |  |  |  | X |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |  |  |  | X |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  | X |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |  |  |  | X |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |  |  |  | X |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  | X |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;104 | Cover Page Interactive Data File (embedded within the Inline XBRL and contained in Exhibit 101) |  |  |  | X |

---

\*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The certification attached as Exhibit 32.1 and Exhibit 32.2 that accompanies this Quarterly Report on Form 10-Q is not deemed filed with the United States Securities and Exchange Commission and is not to be incorporated by reference into any filing of Venus Concept Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 44

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[**Table of Contents**](#toc)

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | Venus Concept Inc. | Venus Concept Inc. |
| Date: August 14, 2025 | By: | /s/ Rajiv De Silva |
|  |  | **Rajiv De Silva** |
|  |  | **Chief Executive Officer** |
| Date: August 14, 2025 | By: | /s/ Domenic Della Penna |
|  |  | **Domenic Della Penna** |
|  |  | **Chief Financial Officer** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 45

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Rajiv De Silva, certify that:

I have reviewed this quarterly report on Form 10-Q of Venus Concept Inc.;

1. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

2. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

3. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

4. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

[SIGNATURE PAGE FOLLOWS]

------

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| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | /s/ Rajiv De Silva |
|  |  | **Name: Rajiv De Silva** |
|  |  | **Chief Executive Officer** <br> **(Principal Executive Officer)** |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002**

I, Domenic Della Penna, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Venus Concept Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

[SIGNATURE PAGE FOLLOWS]

------

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| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | /s/ Domenic Della Penna |
|  |  | **Name: Domenic Della Penna** |
|  |  | **Chief Financial Officer** <br> **(Principal Financial Officer)** |

---

## Exhibit 32.1

**Exhibit 32.1**

**Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Rajiv De Silva, the Chief Executive Officer of Venus Concept Inc. (the "Company"), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

[SIGNATURE PAGE FOLLOWS]

------

---

| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | /s/ Rajiv De Silva |
|  |  | **Name: Rajiv De Silva** |
|  |  | **Chief Executive Officer** <br> **(Principal Executive Officer)** |

---

## Exhibit 32.2

**Exhibit 32.2**

**Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Domenic Della Penna, the Chief Financial Officer of Venus Concept Inc. (the "Company"), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

[SIGNATURE PAGE FOLLOWS]

------

---

| | | |
|:---|:---|:---|
| Date: August 14, 2025 | By: | /s/ Domenic Della Penna |
|  |  | **Name: Domenic Della Penna** |
|  |  | **Chief Financial Officer**<br> **(Principal Financial Officer)** |

---