SCHEDULE: Madryn Boosts Venus Concept Stake to 91% After Nasdaq Guidance

Madryn Asset Management and its affiliates significantly increased their reported beneficial ownership in Venus Concept Inc. to 91.0% following Nasdaq's clarification on preferred stock convertibility.

Summary

• Madryn Asset Management and its affiliates (the "Reporting Persons") have increased their reported beneficial ownership in Venus Concept Inc. to 18,763,125 shares of Common Stock, representing approximately 91.0% of the outstanding class.
• This increase follows guidance received on December 11, 2025, from the Nasdaq Capital Market, which confirmed that no limitations on convertibility would apply to the Series X and Series Y Preferred Stock held by the Reporting Persons.
• Previously, in Amendment No. 10, these shares were excluded from beneficial ownership calculations due to potential Nasdaq convertibility limitations.
• The Reporting Persons acquired these securities for investment purposes and intend to take an active role in working with Venus Concept's management and board on operational, financial, and strategic initiatives, including evaluating strategic alternatives.
• Madryn has engaged in multiple debt-to-equity exchange agreements with Venus Concept, converting various convertible notes and senior indebtedness (including the MSLP Loan) into Series X and Series Y Preferred Stock.
• A non-binding proposal was delivered on May 3, 2024, for a comprehensive restructuring of the Company's debt and equity capital structure, which could result in the Reporting Persons becoming majority owners on a fully diluted basis, contingent on definitive agreements, equity financing, and stockholder consents.
• Shareholders approved the issuance of Common Stock underlying the June 2025 Convertible Notes, Series X Preferred Stock, and Series Y Preferred Stock on June 25, 2025.

Sentiment

Score: 6

Explanation: The removal of Nasdaq convertibility limitations is a positive, clarifying Madryn's significant ownership. However, the underlying need for multiple debt-to-equity exchanges and a proposed comprehensive restructuring indicates ongoing financial challenges for Venus Concept. Madryn's active role is a double-edged sword, showing commitment but also the depth of the company's issues.

Positives

• Nasdaq Capital Market provided guidance on December 11, 2025, confirming no limitations on the convertibility of Series X and Series Y Preferred Stock, removing a previous uncertainty.
• The Reporting Persons now beneficially own a significant majority (91.0%) of Venus Concept's common stock, indicating strong commitment and potential for influence in strategic direction.
• Shareholders approved the issuance of common stock underlying convertible securities on June 25, 2025, clearing a path for these conversions.

Negatives

• The company has undergone multiple debt-to-equity exchanges, suggesting ongoing financial challenges and a need to restructure its balance sheet.
• The proposed comprehensive restructuring, which would make Madryn majority owners, is non-binding and subject to significant conditions, including definitive documentation and successful equity financing, indicating uncertainty.
• The Series Y Preferred Stock carries a liquidation preference equal to twice its issuance price, which is senior to all other classes of outstanding capital stock, potentially diluting common shareholders in a liquidation scenario.

Risks

• Uncertainty regarding the outcome and timing of discussions with the Company concerning the proposed debt and equity restructuring.
• No assurance that a definitive agreement for the proposed restructuring will be executed or consummated.
• The Company's financial position and strategic direction could impact the Reporting Persons' investment.
• Compliance with applicable listing standards, laws, and regulations.
• General economic and industry conditions.

Future Outlook

The Reporting Persons intend to continue taking an active role in working with Venus Concept's management and board on operational, financial, and strategic initiatives, including the evaluation of potential strategic alternatives. They may acquire or dispose of additional securities and engage in discussions regarding financing, extraordinary corporate transactions, changes in governance, and other material business changes. A non-binding proposal for a comprehensive debt and equity restructuring has been made, which, if consummated, would result in the Reporting Persons becoming majority owners of the Company's common stock on a fully diluted basis.

Management Comments

• "The Reporting Persons acquired the securities reported herein for investment purposes."
• "In their capacity as a significant stockholder of the Company, the Reporting Persons have taken and intend to continue to take an active role in working with the Company's management and the board of directors on operational, financial and strategic initiatives, including in connection with the evaluation by the Company's board of directors of potential strategic alternatives."
• "The Reporting Persons intend to review their investments in the Company on a continuing basis."
• "The Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional shares of Common Stock or other securities of the Company... dispose... of some or all of their Common Stock... or continue to hold... Common Stock."
• "The Reporting Persons have engaged and intend to continue engaging in discussions with management or the board of directors of the Company about its business, operations, strategy, plans and prospects."
• "There can be no assurance that a definitive agreement with respect to the Proposal will be executed or, if executed, whether the transaction will be consummated."

Industry Context

This filing reflects a common scenario in the healthcare technology sector where companies facing financial distress or seeking strategic realignment engage with significant investors, often through complex debt-to-equity conversions. Madryn's active role as both a lender and now a dominant equity holder suggests a distressed asset situation where a major investor is stepping in to guide a turnaround or restructuring, a trend seen across various industries for companies needing capital infusion and strategic oversight.

Corporate Governance

Related Party Transactions

• Madryn Health Partners, LP and Madryn Health Partners (Cayman Master), LP (the "Funds") are lenders to Venus Concept Inc. and its subsidiaries under a Credit Agreement.
• The Funds have engaged in multiple exchange agreements with Venus Concept Inc., converting various debt instruments (Credit Agreement debt, 2020 Convertible Notes, 2023 Convertible Notes, March 2025 Convertible Notes, June 2025 Convertible Notes, MSLP Loan) into equity-linked securities (Series X Preferred Stock, Series Y Preferred Stock).
• The Reporting Persons delivered a non-binding proposal for a comprehensive restructuring where they would exchange debt for common stock and become majority owners.

Stakeholder Impact

• Shareholders: Existing common shareholders face significant dilution as Madryn's beneficial ownership now represents 91.0% on a fully diluted basis. The Series Y Preferred Stock's senior liquidation preference also impacts common shareholders in a downside scenario.
• Creditors (Madryn): Madryn, as a primary lender, is actively converting debt to equity, indicating a strategic move to gain control and potentially restructure the company to protect its investment.
• Management/Board: Madryn intends to take an active role in working with management and the board on strategic initiatives, suggesting increased oversight and influence.
• Employees/Customers/Suppliers: The ongoing financial restructuring and potential strategic changes could impact the company's operations, which may indirectly affect employees, customers, and suppliers, though no direct impact is detailed.

Next Steps

• Reporting Persons intend to continue taking an active role in working with Venus Concept's management and board on operational, financial, and strategic initiatives.
• Reporting Persons may acquire or dispose of additional shares of Common Stock or other securities of the Company.
• Reporting Persons intend to continue engaging in discussions with management and the board regarding the proposed restructuring and alternatives.
• Negotiation and execution of definitive documentation for the proposed restructuring.
• Company successfully completing an equity financing as part of the restructuring.
• Obtaining requisite stockholder consents for the restructuring.

Key Dates

Recommendation

The significant increase in Madryn's beneficial ownership to 91% and their stated intent to actively engage in strategic initiatives, including a comprehensive restructuring, signals a major shift in control and direction for Venus Concept. While the Nasdaq guidance removes a convertibility hurdle, the underlying need for such extensive debt-to-equity conversions points to severe financial challenges. The non-binding nature of the restructuring proposal and the conditions attached introduce considerable uncertainty. For an investor, this situation presents high risk and potential for significant volatility. A "hold" recommendation is appropriate as the company is effectively undergoing a recapitalization under the control of a major creditor, and the outcome of this restructuring is still uncertain. Existing shareholders face substantial dilution, but the active involvement of a major investor could also stabilize the company in the long term, making a "sell" premature without more clarity on the restructuring terms and future business prospects.

Keywords

Venus Concept Inc., Madryn Asset Management, Schedule 13D, Beneficial Ownership, Debt Restructuring, Preferred Stock, Convertible Notes, Nasdaq Capital Market, Equity Financing, Corporate Governance, SEC Filing, Investment Management, Healthcare Technology