SCHEDULE: Madryn Takes Venus Concept Private at $0.04/Share

Madryn Asset Management completed a short-form merger, acquiring all outstanding common stock of Venus Concept Inc. for $0.04 per share, taking the company private.

Summary

• Madryn Asset Management, through its affiliated funds, has completed a series of transactions culminating in a short-form merger, resulting in 100% ownership of Venus Concept Inc.
• The process involved multiple debt-to-equity exchanges over several years, converting various convertible notes and senior indebtedness into preferred and common stock.
• On March 26, 2026, Madryn's Funds purchased 37,500,000 shares of common stock from Venus Concept Inc. for $1,500,000, at a price of $0.04 per share.
• Concurrently, Madryn acquired all shares of common and preferred stock, as well as convertible debt, held by EW Healthcare Partners and HealthQuest Partners II, L.P. for an aggregate of $2,600,000 and $755,646.90, respectively.
• On March 30, 2026, a short-form merger was consummated, converting each outstanding share of common stock not owned by Madryn into the right to receive $0.04 in cash.
• Following the merger, Venus Concept Inc.'s Certificate of Incorporation was amended to effect a 1000-to-1 reverse stock split and reduce the number of authorized shares.
• The company's existing board of directors resigned and was replaced by the board of directors of Venus Merger Holdings Corporation, the legal entity used by Madryn to consummate the merger.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly negative event for common shareholders, who were cashed out at a minimal value, reflecting the company's severe financial distress and the prioritization of debt and preferred equity holders.

Positives

• Madryn Asset Management has consolidated 100% ownership of Venus Concept Inc., providing full control over strategic and operational decisions.
• The take-private transaction eliminates the costs and complexities associated with being a publicly traded company, potentially streamlining operations.
• The restructuring allows Madryn to implement its vision for the company without public market pressures or minority shareholder concerns.

Negatives

• Common stockholders of Venus Concept Inc. were cashed out at a price of $0.04 per share, indicating a significant loss for prior public investors.
• The low cash-out price reflects a distressed valuation, suggesting the company faced severe financial challenges prior to the take-private.

Risks

• The common stock had little to no value for public shareholders due to the company's debt and liquidation preferences of preferred stock, leading to the low cash-out price.
• The company's financial position and strategic direction were under review, indicating underlying operational and financial challenges that necessitated the restructuring.

Future Outlook

Madryn Asset Management intends to continue taking an active role in working with Venus Concept Inc.'s management and board of directors on operational, financial, and strategic initiatives. Madryn will review its investment on an ongoing basis and may take further actions regarding its ownership, including potential acquisitions or dispositions of securities, or other corporate transactions, now as the sole owner of the private entity.

Management Comments

• Madryn discussed with the Company's board of directors its desire for the Company to reduce operational costs, including the potential delisting and deregistration of the Company's Common Stock.
• The price per share of $0.01 (in the initial March 2026 Proposal) reflected the little to no value of the expected distribution to the holders of Common Stock upon a liquidation of the Company's assets after taking into consideration the repayment of the Company's debt and other obligations and the liquidation preference associated with the currently outstanding shares of the Company's preferred stock.

Industry Context

StockSavvy.ai notes that this transaction represents a distressed take-private scenario, a common occurrence when a company faces significant financial challenges and a major lender or investor converts debt into equity to gain full control. Such moves often result in public common shareholders receiving minimal value, as the company's assets are primarily used to satisfy senior debt and preferred equity holders. This allows the new sole owner to restructure the business away from public scrutiny and the associated costs.

Comparison to Industry Standards

• The cash-out price of $0.04 per common share is indicative of a highly distressed valuation, aligning with outcomes seen in other companies undergoing similar debt-for-equity restructurings and subsequent take-private transactions.
• In such scenarios, common shareholders typically bear the brunt of financial distress, as senior creditors and preferred shareholders have priority in liquidation or restructuring events.
• This outcome is consistent with situations where a company's market capitalization has significantly eroded, and its debt obligations, coupled with preferred stock liquidation preferences, leave little to no residual value for common equity.

Management Changes

Corporate Governance

Related Party Transactions

• The various Exchange Agreements (2020, 2023, May 2024, September 2024, March 2025, June 2025, September 2025) between the Company and Madryn's Funds, involving the exchange of debt instruments for preferred stock and convertible notes.
• The Stock Purchase Agreement (March 2026 Company SPA) where Madryn's Funds purchased 37,500,000 shares of Common Stock from the Company.
• The Securities Purchase Agreement (March 2026 EW SPA) where Madryn's Funds purchased preferred stock and convertible notes from EW Healthcare Partners.
• The Securities Purchase Agreement (March 2026 HealthQuest SPA) where Madryn's Funds purchased common and preferred stock from HealthQuest Partners II, L.P.
• The Contribution and Exchange Agreement between Madryn's Funds and Venus Merger Holdings Corporation, where Funds transferred all shares to Merger Holdings in exchange for 100% equity interests.

Stakeholder Impact

• Common shareholders: Negatively impacted, as their shares were converted into a low cash amount of $0.04 per share, reflecting a significant loss on their investment.
• Madryn Asset Management (and its Funds): Positively impacted, gaining 100% control of Venus Concept Inc., allowing for full strategic and operational flexibility without public market constraints.
• Employees: Potential for operational changes and restructuring under new private ownership, which could impact employment.
• Creditors: Madryn, as a former significant lender, has converted much of its debt into equity, consolidating its position and effectively becoming the primary creditor/owner.

Next Steps

• Madryn Asset Management will continue to review its investment in Venus Concept Inc. on an ongoing basis.
• Madryn intends to take an active role in working with the company's management and board on operational, financial, and strategic initiatives.
• The company's Certificate of Incorporation has been amended to effect a 1000-to-1 reverse stock split and reduce authorized shares, and the board has been replaced, indicating internal restructuring for the now-private entity.

Key Dates

Keywords

Venus Concept, Madryn Asset Management, Schedule 13D, Short-form Merger, Take-private, Convertible Notes, Preferred Stock, Delisting, Deregistration, Equity Financing, Debt Restructuring