SCHEDULE 13D/A: Avenue Capital Group Converts Portion of Eyenovia Loan into Equity, Reaching 9.99% Stake

Avenue Capital Group entities have converted $680,098 of their $10 million loan to Eyenovia, Inc. into 404,820 shares of common stock, bringing their aggregate beneficial ownership to 9.99% due to a pre-existing blocker.

Summary

• Avenue Venture Opportunities Fund, L.P. and Avenue Venture Opportunities Fund II, L.P. (the "Funds") converted an aggregate of $680,098 of their Capital Growth Loan to Eyenovia, Inc. on June 11, 2025.
• This conversion resulted in the issuance of 404,820 shares of Eyenovia's Common Stock to the Funds.
• The conversion reduced the principal balance of the original $10 million loan to $9,319,902.
• The conversion price for the shares was $1.68 per share.
• Following this transaction, the Reporting Persons (Avenue Capital Group entities) collectively own 435,438 shares of Eyenovia's Common Stock, representing 9.99% of the outstanding shares.
• Their beneficial ownership is limited by a 9.99% blocker, preventing full conversion of the remaining loan principal at this time.
• The percentage of class is based on 4,358,755 shares of Eyenovia's common stock outstanding as of June 5, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. It reflects a pre-arranged transaction (debt-to-equity conversion) which reduces the company's debt while increasing a significant investor's equity stake. The presence of a beneficial ownership blocker limits immediate full conversion, which could be seen as a slight negative for the investor, but overall, it's a planned financial maneuver.

Positives

• The conversion of a portion of the loan reduces Eyenovia's outstanding debt by $680,098, potentially improving its balance sheet.
• The Reporting Persons have increased their direct equity stake in Eyenovia, aligning their interests more closely with other shareholders.

Negatives

• The 9.99% beneficial ownership blocker prevents the Reporting Persons from fully converting their remaining loan principal into equity, limiting their immediate upside from conversion.
• The conversion results in dilution for existing shareholders as new shares are issued, although the number of shares issued in this specific conversion is relatively small compared to total outstanding shares.

Risks

• The 9.99% beneficial ownership blocker limits the Reporting Persons' ability to convert the full loan amount into equity, potentially restricting their investment strategy.
• The Reporting Persons may dispose of some or all of their shares in the future, which could exert downward pressure on Eyenovia's stock price.
• Future changes in general economic and industry conditions, as well as Eyenovia's business and financial performance, could impact the value of the Reporting Persons' investment.

Future Outlook

The Reporting Persons intend to periodically review their investment in Eyenovia based on various factors, including the Issuer's business, financial condition, and market conditions. They may take future actions such as disposing of some or all shares, or acquiring additional shares through further debt conversion or privately negotiated transactions. They also retain the right to change their investment purpose or formulate new plans.

Industry Context

This filing primarily details a change in a significant investor's stake and debt position within Eyenovia, Inc. It does not provide broader industry trends or competitive analysis, focusing instead on the specific financial relationship between the investor and the company.

Related Party Transactions

• The conversion of the Capital Growth Loan principal into common stock is an update to a pre-existing loan agreement between Eyenovia, Inc. and the Reporting Persons (Avenue Capital Group entities), which are related parties through their investment relationship.

Stakeholder Impact

• Shareholders: Experience slight dilution due to the issuance of new shares, but the company's debt is reduced. The increased equity stake of a significant investor may be viewed positively or negatively depending on their future actions.
• Creditors: The reduction in loan principal by $680,098 improves the company's debt profile, potentially reducing risk for remaining creditors.

Next Steps

• Reporting Persons will continue to review their investment in Eyenovia.
• Reporting Persons may dispose of some or all of their shares in the future.
• Reporting Persons may acquire additional shares through further debt conversion or privately negotiated transactions.
• The 9.99% beneficial ownership blocker may be changed to up to 19.99% at the Reporting Persons' election upon at least 61 days' notice to the Issuer.

Key Dates

Keywords

Eyenovia Inc., Avenue Capital Group, Schedule 13D, Debt Conversion, Equity Stake, Loan Agreement, Beneficial Ownership, SEC Filing, Investment Fund, Common Stock