Form 4: Madryn Converts $11.4M Debt to Equity in Venus Concept

Madryn Asset Management and affiliates exchanged over $11 million in convertible notes for Series Y Convertible Preferred Stock in Venus Concept Inc.

Summary

• Madryn Asset Management, LP, Madryn Health Partners (Cayman Master), LP, and Madryn Health Advisors, LP, identified as 10% owners and directors of Venus Concept Inc., completed a significant debt-to-equity conversion.
• The reporting persons disposed of secured subordinated convertible notes with an aggregate principal amount of $11,479,307.35.
• This principal amount included an initial balance of $11,096,478.80 and $382,828.52 of interest paid-in-kind as of September 30, 2025.
• In exchange for the notes, Madryn acquired 545,335 shares of Series Y Convertible Preferred Stock.
• Each share of Series Y Preferred Stock is convertible into 9.0909 shares of common stock, representing a potential conversion of 4,957,587 common shares.
• The Series Y Preferred Stock is perpetual and does not have an expiration date.

Sentiment

Score: 6

Explanation: The conversion of debt to equity is generally positive for the issuer's balance sheet by reducing debt obligations. However, it introduces potential future dilution for common shareholders, creating a mixed sentiment.

Positives

• For Venus Concept, the conversion of over $11 million in debt to equity reduces its immediate debt burden and improves its balance sheet structure.
• For Madryn, the transaction increases its equity stake and long-term commitment to Venus Concept, potentially aligning its interests more closely with the company's future performance.

Negatives

• The potential conversion of 545,335 shares of Series Y Preferred Stock into 4,957,587 shares of common stock represents significant potential dilution for existing common shareholders.

Risks

• Future dilution of common stock value upon conversion of the Series Y Preferred Stock.
• Increased influence of Madryn Asset Management and its affiliates due to a larger equity stake, potentially impacting corporate governance decisions.

Future Outlook

The Series Y Convertible Preferred Stock is perpetual and convertible into common stock at the option of the holder or automatically upon certain conditions, indicating a long-term equity commitment from Madryn Asset Management and potential future dilution for common shareholders.

Industry Context

This transaction reflects a specific financial restructuring by a significant investor in Venus Concept Inc., a company operating in the medical aesthetics industry. While not directly indicative of broader industry trends, such debt-to-equity conversions can be a strategy for companies to strengthen their balance sheets or for investors to increase their equity exposure in a sector.

Related Party Transactions

• The transaction involves Madryn Asset Management and its affiliates, who are identified as 10% owners and directors of Venus Concept Inc., making it a related party transaction.

Stakeholder Impact

• Shareholders: Potential future dilution of common stock value upon conversion of the Series Y Preferred Stock.
• Creditors: Reduction in Venus Concept Inc.'s debt obligations due to the conversion of secured subordinated convertible notes.

Next Steps

• Potential future conversion of Series Y Convertible Preferred Stock into common stock by Madryn Asset Management and its affiliates.

Key Dates

Recommendation

This Form 4 reports a significant debt-to-equity conversion by a major insider. While the reduction of debt is a positive for Venus Concept's balance sheet, the potential for substantial dilution from the convertible preferred stock introduces uncertainty for common shareholders. Investors should hold and monitor the company's operational performance and future conversion activities, as this transaction alone does not provide sufficient information for a strong buy or sell recommendation.

Keywords

Venus Concept, VERO, Madryn Asset Management, Debt-to-Equity Conversion, Convertible Notes, Preferred Stock, SEC Form 4, Insider Transaction, Equity Stake, Dilution