Note 10 - Main Street Term Loan |
12 Months Ended | ||||||||||||||||||||
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Dec. 31, 2024 | |||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||
| Debt Disclosure [Text Block] |
10. MAIN STREET TERM LOAN
On December 8, 2020, the Company executed the MSLP Loan Agreement, the MSLP Note, and related documents for a loan in the aggregate amount of $50,000 for which CNB will serve as a lender pursuant to 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 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 is 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 USA Inc., Venus Canada and Venus Ltd. (Venus Ltd., 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. 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 the 2024 Exchange Agreement whereby the Company exchanged $52,142 in aggregate principal amount outstanding under the MSLP Loan Agreement for $17,142 in New Secured Notes and 576,986 shares of Series Y Convertible Preferred Stock. The Series Y Convertible Preferred Stock is priced at $667.26 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) 9.0909. 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 Convertible 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.
As of December 31, 2024 and December 31, 2023, the Company was in compliance with all required covenants.
The scheduled payments, inclusive of principal and estimated interest, on the outstanding borrowings as of December 31, 2024 are as follows:
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