SCHEDULE: EW Healthcare Partners Sells Venus Concept Stake

EW Healthcare Partners has sold a significant portion of its holdings in Venus Concept, Inc. to Madryn Asset Management for $2.6 million.

Summary

• EW Healthcare Partners (Reporting Persons) sold various securities of Venus Concept, Inc. to Madryn Asset Management, LP.
• The sale included 1,500,000 shares of Voting Convertible Preferred Common Stock, 1,575,810 shares of Senior Convertible Preferred Stock, and Secured Subordinated Convertible Notes.
• The aggregate purchase price for these securities was $2,600,000.
• Payment will be made in four equal cash installments of $650,000 over 18, 24, 30, and 36 months from March 26, 2026.
• Following the transaction, the Reporting Persons beneficially own 100,037 shares of Venus Concept Common Stock, representing 5.4% of the outstanding class.
• This beneficial ownership includes 99,021 directly held shares and 1,016 shares from stock options exercisable within 60 days, held for the benefit of the Reporting Persons.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event for Venus Concept, Inc. as it primarily reflects a change in significant institutional ownership rather than a direct operational or financial performance update. For the selling entity, it's a realization of investment.

Positives

• Madryn Asset Management acquired a significant stake in Venus Concept, potentially indicating new institutional interest and a new strategic partner.
• The EW Selling Securityholders received $2.6 million in exchange for their preferred stock and convertible notes, providing liquidity.

Negatives

• EW Healthcare Partners significantly reduced its stake in Venus Concept, which could be interpreted as a divestment strategy by a long-term investor.
• The sale price of $2.6 million for a substantial block of preferred stock and convertible notes might suggest a valuation below previous expectations for the selling party, though context is limited.

Risks

• Reporting Persons will continue to review the business of the Issuer and may in the future propose actions related to the Issuer's business, which could include changes in management, corporate structure, or asset sales.

Future Outlook

The Reporting Persons state they have no present plan or proposal for the Issuer, other than the described transaction, but will continue to review the Issuer's business and may propose future actions.

Industry Context

StockSavvy.ai notes that this transaction represents a shift in institutional ownership for Venus Concept, Inc., with a long-standing healthcare investor reducing its stake and a new asset manager, Madryn, increasing its exposure. This could signal a re-evaluation of the company's strategic direction or valuation within the medical aesthetics and healthcare technology sector.

Comparison to Industry Standards

• The sale of preferred stock and convertible notes to another institutional investor is a common mechanism for private equity or venture capital firms to realize value from their investments.
• The structured payment plan over 36 months suggests a negotiated exit strategy, potentially reflecting market conditions or specific agreements between the parties rather than an immediate cash-out.

Related Party Transactions

• The Secured Subordinated Convertible Notes were originally issued by Venus Concept, Inc. to EW Selling Securityholders on January 18, 2024, which would have constituted a related party transaction at the time of issuance.

Stakeholder Impact

• Shareholders: A change in significant institutional ownership could lead to new strategic directions or influence on corporate governance. The sale by EW Healthcare Partners might be interpreted differently by existing shareholders.
• Creditors: The sale of convertible notes to a new entity (Madryn) means a change in the holder of those notes, but the terms of the notes themselves are not detailed as changing.

Next Steps

• Madryn Asset Management will make four cash installments of $650,000 each to EW Selling Securityholders over the next 18, 24, 30, and 36 months.
• The Reporting Persons will continue to review the business of Venus Concept, Inc.
• The Reporting Persons may in the future propose actions related to the Issuer's business.

Key Dates

Recommendation

The filing details a significant change in institutional ownership, with EW Healthcare Partners reducing its stake and Madryn Asset Management acquiring preferred stock and convertible notes. While this provides liquidity for the seller and introduces a new major investor, the implications for Venus Concept's future performance are not immediately clear from this filing alone. The structured payment plan for the sale suggests a negotiated exit rather than a strong vote of confidence or lack thereof. Investors should hold and monitor future developments, particularly any strategic shifts or operational updates from Venus Concept, Inc., and the actions of the new significant holder, Madryn Asset Management.

Keywords

Venus Concept Inc., EW Healthcare Partners, Madryn Asset Management, Schedule 13D/A, Beneficial Ownership, Common Stock, Preferred Stock, Convertible Notes, Securities Purchase Agreement, Healthcare Investment