SCHEDULE: Hyperion DeFi Ownership Update: Avenue Funds Adjust Holdings

Avenue Capital Group entities updated their beneficial ownership in Hyperion DeFi, Inc., reflecting changes due to an increase in the issuer's outstanding common stock.

Summary

• Reporting Persons, including various Avenue Capital Group entities and Marc Lasry, filed Amendment No. 5 to their Schedule 13D for Hyperion DeFi, Inc. (Issuer).
• The amendment reports a change in beneficial ownership primarily due to an increase in the Issuer's outstanding shares of common stock.
• Hyperion DeFi, Inc. had 5,694,659 shares of common stock outstanding as of August 11, 2025, as reported in its Form 10-Q for the quarter ending June 30, 2025.
• Avenue Capital Management II, L.P. beneficially owns 354,291 shares, representing 6.2% of the class, and holds sole voting and dispositive power over these shares.
• The aggregate beneficial ownership by each Reporting Person is limited by a 9.99% 'blocker' of the outstanding common stock.
• Warrants to purchase an aggregate of 250,000 shares of common stock held by the Funds are excluded from the reported beneficial ownership due to the effect of this blocker.

Sentiment

Score: 5

Explanation: The filing is a neutral, factual update on beneficial ownership percentages. While it notes an increase in outstanding shares, the reason for this increase is not detailed, preventing a more specific sentiment assessment. The blocker mechanism adds a layer of complexity but doesn't inherently signal positive or negative sentiment.

Positives

• Continued investment and oversight by Avenue Capital Group, a significant financial entity, indicates ongoing interest in Hyperion DeFi, Inc.
• The existence of a 'blocker' mechanism limits immediate dilution impact from warrant exercises on reported beneficial ownership percentages.

Negatives

• The beneficial ownership percentage for the reporting persons has decreased relative to the total outstanding shares, indicating dilution from an increase in the Issuer's common stock.
• The filing does not detail the specific reason for the increase in outstanding shares, which could be a concern if it was for non-value-accretive purposes.

Risks

• Potential future dilution if the 9.99% beneficial ownership blocker is increased to 19.99% and warrants are subsequently exercised.
• Uncertainty regarding the purpose and impact of the increase in Hyperion DeFi's outstanding common stock on shareholder value.

Future Outlook

The reporting persons have the option to increase their beneficial ownership blocker from 9.99% to up to 19.99% upon providing at least 61 days' notice to Hyperion DeFi, Inc.

Industry Context

This filing is a routine update on beneficial ownership, common in the investment fund sector, and does not provide specific industry-wide insights. It reflects a change in the ownership structure of Hyperion DeFi, Inc., a company likely operating in the decentralized finance (DeFi) space, given its name.

Stakeholder Impact

• Shareholders: Existing shareholders may experience dilution due to the increase in outstanding common stock, though the specific cause of this increase is not detailed.
• Reporting Persons: Their beneficial ownership percentage has adjusted downwards relative to the increased share count, but their overall investment structure remains consistent with previous filings.

Key Dates

Recommendation

This filing is a routine amendment to a Schedule 13D, providing an update on beneficial ownership percentages for Avenue Capital Group entities in Hyperion DeFi, Inc. It notes a change in ownership due to an increase in the issuer's outstanding common stock. Without further information on the reason for the increased share count or the company's operational performance, there is no basis to change an existing investment stance. The 'blocker' mechanism is a technical detail related to ownership limits rather than a fundamental change in the company's prospects. Therefore, a 'hold' recommendation is appropriate as this filing does not present new material information warranting a 'buy' or 'sell' decision.

Keywords

Hyperion DeFi, Avenue Capital Group, Schedule 13D, Beneficial Ownership, Common Stock, SEC Filing, Investment Funds, Warrants, Equity, Dilution