SCHEDULE 13D/A: Eyenovia Investor Avenue Capital Implements 9.99% Ownership Blocker Amidst Loan Conversion Rights and Past Reporting Lapses
Major Shareholder Disclosure
Avenue Capital Group, a significant investor in Eyenovia, Inc., has implemented a 9.99% ownership blocker on its convertible loans, while also disclosing past instances where its beneficial ownership fell below 5% due to increases in Eyenovia's outstanding shares.
Summary
- This Amendment No. 1 to Schedule 13D reports that Avenue Capital Group and its related entities (the "Reporting Persons") have entered into a Third Amendment to the Supplement with Eyenovia, Inc. on May 30, 2025, establishing a 9.99% "blocker" provision.
- The blocker prevents the Reporting Persons from converting their loans to the extent that their beneficial ownership would exceed 9.99% of Eyenovia's outstanding common stock.
- The Reporting Persons initially provided a $10 million Growth Capital Loan to Eyenovia on November 22, 2022, and received an equity grant of 547,807 shares of common stock.
- Effective February 21, 2025, the Reporting Persons acquired the right to convert up to $10 million of the loan principal into common stock at a conversion price of $1.68 per share, convertible at any time on or after April 1, 2025.
- The filing also discloses that the Reporting Persons' beneficial ownership fell below 5% on two occasions: to 4.9% on June 30, 2024, and to 4.11% on December 9, 2024, primarily due to increases in Eyenovia's outstanding shares.
- A one-for-eighty reverse stock split of Eyenovia's common stock became effective on January 31, 2025.
- Prior to the implementation of the 9.99% blocker, the Reporting Persons' potential beneficial ownership could have reached 74.02% based on 2,100,000 shares outstanding as of January 28, 2025, and 67.88% based on 2,830,546 shares outstanding as of April 11, 2025.
- As of the filing date, the percentage of class represented by the Reporting Persons' beneficial ownership, after giving effect to the blocker, is 9.99%.
Sentiment
Score: 6
Explanation: The sentiment is moderately positive. While there's a disclosure of a late filing by the reporting party, the core content reveals a significant capital infusion ($10M loan) into Eyenovia and the implementation of an ownership blocker that limits immediate dilution, which can be viewed favorably by existing shareholders. The potential for future dilution remains but is currently capped.
Positives
- The initial $10 million Growth Capital Loan provided significant funding to Eyenovia.
- The newly implemented 9.99% "blocker" provision limits the immediate potential dilution from the conversion of the Reporting Persons' loans, providing some stability to the share structure.
Negatives
- The Reporting Persons filed this amendment late regarding their beneficial ownership falling below 5% on two separate occasions, citing inadvertent omission.
- Despite the blocker, there remains significant potential for future dilution if the blocker is increased or removed, as the Reporting Persons hold rights to convert up to $10 million of debt into equity at $1.68 per share.
Risks
- Potential future dilution of existing shareholders if the Reporting Persons elect to increase the 9.99% ownership blocker to 19.99% (with 61 days' notice) or higher, and subsequently convert their substantial loan principal into common stock.
- The Reporting Persons' stated intent to review their investment and potentially dispose of some or all of their shares could create selling pressure on Eyenovia's stock.
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. Based on this review, they may take future actions such as disposing of some or all of their shares or acquiring additional shares through debt conversion or privately negotiated transactions. They may also reconsider their position or change their plans at any time.
Industry Context
This filing primarily details a significant investor's stake and related financial agreements within Eyenovia, Inc., rather than providing broad industry trends. It highlights the dynamics of venture debt financing and equity conversion in the biotechnology or pharmaceutical sector, where companies like Eyenovia often rely on such capital structures for growth and development.
Stakeholder Impact
- Shareholders: The implementation of the 9.99% blocker limits immediate dilution from the conversion of the Reporting Persons' loans, which could be seen as positive. However, the potential for future dilution remains if the blocker is increased or removed. The Reporting Persons' future actions (disposal or acquisition of shares) could impact share price.
- Creditors: The conversion of debt to equity would reduce Eyenovia's debt obligations to the Reporting Persons.
Next Steps
- The Reporting Persons intend to periodically review their investment in Eyenovia based on various factors, including the Issuer's business, financial condition, results of operations, prospects, and general market conditions.
- Based on their review, the Reporting Persons may dispose of some or all of the shares currently owned or acquired through debt conversion or privately negotiated transactions.
- The Reporting Persons may, at any time, review or reconsider their position and/or change their purpose and/or formulate new plans or proposals regarding their investment.
Key Dates
| Date | Description |
|---|---|
| 2022-11-11 | Issuer reported 36,112,987 shares of common stock outstanding. |
| 2022-11-22 | Fund and Fund II entered into a Loan and Security Agreement with Eyenovia, providing an initial Growth Capital Loan of $10 million and receiving an equity grant of 547,807 shares. Reporting Persons beneficially owned 7.38% of Issuer's common stock. |
| 2024-06-30 | Reporting Persons' beneficial ownership fell to 4.9% due to an increase in Issuer's outstanding shares (55,817,921 shares outstanding). |
| 2024-11-08 | Issuer reported 86,441,661 shares of common stock outstanding. |
| 2024-11-22 | Pursuant to a First Amendment to the Supplement, Issuer issued 1,907,733 shares of common stock to Reporting Persons, increasing their beneficial ownership to 5.24%. |
| 2024-12-09 | Reporting Persons' beneficial ownership fell to 4.11% due to an increase in Issuer's outstanding shares (111,425,129 shares outstanding). |
| 2025-01-28 | Issuer reported 2,100,000 shares of common stock outstanding. |
| 2025-01-31 | Effective date of Eyenovia's one-for-eighty reverse stock split. Reporting Persons beneficially owned 52.90% of Issuer's common stock post-split. |
| 2025-02-21 | Pursuant to a Second Amendment to the Supplement, Reporting Persons acquired the right to convert up to $10 million of the Principal at $1.68 per share, potentially resulting in 74.02% beneficial ownership. |
| 2025-04-01 | Date on or after which the loan conversion right became active. |
| 2025-04-11 | Issuer reported 2,830,546 shares of common stock outstanding. Reporting Persons' potential beneficial ownership was 67.88% before the blocker. |
| 2025-05-15 | Original Schedule 13D filed with the SEC. |
| 2025-05-30 | Reporting Persons and Issuer entered into a Third Amendment to the Supplement, establishing the 9.99% "blocker" provision. |
| 2025-06-03 | Date of this Amendment No. 1 filing. |
Keywords
Eyenovia, SEC filing, Schedule 13D, beneficial ownership, convertible loan, equity stake, Avenue Capital Group, reverse stock split, ownership blocker, dilution, capital structure
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