Venus Concept Stock Is Soaring On Friday - Here's Why

Venus Concept Inc. VERO shares are trading higher on Friday after disclosing that the firm entered into definitive agreements to purchase and sell 434,720 shares of common stock at a purchase price of $2.65 per share in a registered direct offering.

In a concurrent private placement, the company will issue unregistered short-term warrants to purchase up to 869,440 shares of common stock at an exercise price of $2.65 per share.

Venus expects approximately $1.15 million in gross proceeds from the offering. If fully exercised, the potential additional gross proceeds from the unregistered short-term warrants will be approximately $2.3 million.

Venus anticipates the offering to close on or about June 9.

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Venus Concept also announced a strategic move Friday involving the divestiture of its hair restoration business in a $20 million cash deal aimed at strengthening its core medical aesthetics segment.

The company has entered into a definitive agreement with MHG Co. Ltd, also known as Meta Healthcare Group, to sell its Venus Hair division.

This deal is part of a broader strategy to boost financial stability and sharpen focus on high-growth areas.

As per the terms, Meta Healthcare Group will acquire Meta Robotics LLC, a newly established Venus Concept subsidiary that encompasses the company's full hair restoration portfolio—including ARTAS and NeoGraft technologies—along with associated services, equipment, assets, and intellectual property.

Meta will also take over Venus Concept's research and manufacturing facility in San Jose, California, and gain the rights to produce NeoGraft systems.

In return, Meta will grant Venus Concept a perpetual, royalty-free global license covering certain patents included in the transaction.

CEO Rajiv De Silva described the agreement as a step forward in Venus Concept's plan to unlock shareholder value.

The capital raised is expected to help the firm reduce operating costs, improve cash flow, and enhance focus on its primary aesthetic device business. "We are confident Meta Healthcare Group will provide the strategic investment and resources needed to maximize the global addressable markets for the ARTAS and NeoGraft technologies.," De Silva said.

In fiscal year 2024, the Venus Hair business contributed approximately $12.5 million in revenue while incurring operational cash usage of around $6.7 million.

Price Action: VERO shares traded higher by 35.1% to $3.230 at last check Friday.

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