| Item 1.01 | Entry into a Material Definitive Agreement. |
Issuance of Convertible Promissory Notes by Venus Concept and Issuance of Subordinated Promissory Note by Restoration Robotics
On June 25, 2019, Restoration Robotics, Inc. (the “Company”) entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Venus Concept Ltd. (“Venus Concept”) and certain investors named therein pursuant to which Venus Concept sold $7.8 million aggregate principal amount of unsecured senior subordinated convertible promissory notes (the “Convertible Notes”) to such investors (the “Convertible Note Financing”). Pursuant to the Note Purchase Agreement, Venus Concept may sell up to $10.0 million of Convertible Notes without further approval of the board of directors of Venus Concept (the “Venus Concept Board”), and up to an additional $5.0 million of Convertible Notes subject to the approval of the Venus Concept Board. The Convertible Notes bear interest on the unpaid principal amount at a rate of eight percent (8.0%) per annum from the date of issuance. Subject to receipt of the approval of the Company’s stockholders to the extent required under the rules of The Nasdaq Stock Market LLC, effective upon the closing of the proposed merger between the Company and Venus Concept pursuant to that Agreement and Plan of Merger and Reorganization dated March 15, 2019, all of the outstanding principal and unpaid accrued interest on the Convertible Notes will automatically be converted, in whole, into the number of shares of common stock, par value $0.0001 per share, of the Company at a conversion price of $0.4664 per share.
In connection with the Convertible Note Financing, the Company raised $2.5 million through the issuance of an unsecured subordinated promissory note (the “Subordinated Note”) to Venus Concept USA, Inc., a wholly owned subsidiary of Venus Concept. The maturity date of the Subordinated Note is November 30, 2019 (the “Maturity Date”). The Subordinated Note bears interest on the unpaid principal amount at a rate of eight percent (8%) per annum from the date of issuance, provided that upon any event of default pursuant to the Subordinated Note, the Subordinated Note shall bear interest payable on demand at a rate that is 4% per annum in excess of the rate of interest otherwise payable under thereunder. The Subordinated Note is unsecured and subordinate in priority to the Company’s existing obligations to Solar Capital, Ltd. under its amended loan and security agreement.
The foregoing description of the Note Purchase Agreement, the Convertible Notes and the Subordinated Note does not purport to be complete and is qualified in its entirety by reference to the full text of the Note Purchase Agreement, the Convertible Notes and the Subordinated Note, each of which will be filed as an exhibit to the Company’s Quarterly Report on Form10-Q for the quarter ended June 30, 2019.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation Under anOff-Balance Sheet Arrangement of the Registrant. |
The information set forth in Item 1.01 of this Current Report on Form8-K is incorporated herein by reference.
| Item 3.02 | Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 of this Current Report on Form8-K is incorporated herein by reference. The Convertible Notes were issued pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506 of Regulation D promulgated under the Securities Act.
