Heron (HRTX) sells Series A Preferred; Velan Master gains convertible stake

Rhea-AI Filing Summary

Heron Therapeutics reported a private placement under a Securities Purchase Agreement through which Velan Capital Master Fund LP purchased both Common Stock and Series A Convertible Preferred Stock. Velan Master bought 70,012 shares of Series A Preferred (convertible at $1.50 per share, equal to 700,120 underlying common shares) and participated in a common stock purchase at $1.50 per share. The transaction closed pursuant to the SPA and the reporting shows Velan Master’s indirect beneficial ownership as 8,753,290 shares following the transactions, while the reporting person recorded a disposition of 69,777 shares. The Series A Preferred will automatically convert into Common Stock upon the specified stockholder approval, subject to an ownership cap that prevents Velan Master from owning more than 4.99% of outstanding common stock unless increased with notice.

Positive

• Private placement provided new capital with common stock at $1.50 and Series A Preferred at $15, supporting the issuer’s financing needs
• Velan Master purchased 70,012 Series A Preferred, which converts into 700,120 common shares, indicating investor commitment
• Ownership cap of 4.99% limits concentration risk from a single purchaser following conversion

Negative

• Automatic conversion of Series A Preferred will increase outstanding common shares, creating potential dilution for existing shareholders
• Reporting person recorded a disposition of 69,777 common shares, representing an insider sale disclosed on the Form 4
• Beneficial ownership is indirect (held by Velan Master) and the reporting person disclaims direct beneficial ownership, which may limit clarity on insider alignment

Insights

Financial Analyst

TL;DR: A private placement provided new capital and a sizeable strategic stake by Velan Master, with conversion features and ownership limits that matter to shareholders.

The SPA represents a direct capital infusion into the company with common stock sold at $1.50 and Series A Preferred sold at $15 per share. Velan Master’s purchase of 70,012 Series A Preferred (convertible into 700,120 common shares) increases potential common share count upon conversion, which will occur automatically upon approval but is explicitly capped to prevent Velan Master exceeding 4.99% ownership. The report also discloses a sale of 69,777 common shares by the reporting person and notes that the securities are held indirectly by Velan Master. For investors, the material points are the fresh capital, the conversion mechanics that expand outstanding common shares, and the ownership-limit safeguard which constrains a single investor’s stake.

Corporate Governance Expert

TL;DR: Transaction uses convertible preferred with automatic conversion and an expressed ownership cap, raising governance and control considerations.

The structure—issuance of Series A Convertible Preferred that converts automatically upon stockholder approval—creates a contingent increase in common shares and could alter voting dynamics if conversion occurs. The explicit 4.99% beneficial ownership limit for Velan Master is a contractual check on concentration, and the report discloses that the reported director may be deemed to beneficially own the securities indirectly through Velan Master but disclaims direct beneficial ownership except for pecuniary interest. These elements are important for assessing potential changes in shareholder composition and any related control considerations.

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

Check this box to indicate that a transaction was made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c). See Instruction 10.

1. Name and Address of Reporting Person^*

Morgan Adam

(Last) (First) (Middle)

100 REGENCY FOREST DRIVE

SUITE 300

(Street)

CARY NC 27518

(City) (State) (Zip)

2. Issuer Name and Ticker or Trading Symbol
HERON THERAPEUTICS, INC. /DE/ [ HRTX ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director		10% Owner
	Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
08/08/2025

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price
Common Stock	08/08/2025		P		1,766,546(1)	A	$1.5(1)	8,753,290	I	By Velan Capital Master Fund LP(2)
Common Stock								69,777	D

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
				Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Series A Convertible Preferred Stock(3)	$1.5(3)	08/08/2025		P		70,012(3)		(4)	(4)	Common Stock	700,120(4)	$15(1)	70,012	I	By Velan Capital Master Fund LP(2)

Explanation of Responses:

1. The Issuer entered into a Securities Purchase Agreement (the "SPA") with certain investors (collectively, the "Purchasers"), including Velan Capital Master Fund LP ("Velan Master"), pursuant to which the Issuer agreed to issue and sell to the Purchasers in a private placement shares of the Issuer's Common Stock, par value $0.01 per share (the "Common Stock"), and shares of the Issuer's Series A Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), at a purchase price of $1.50 per share of Common Stock and $15 per share of Series A Preferred Stock. The transaction closed on August 12, 2025.

2. Securities owned directly by Velan Master. Mr. Morgan, as a managing member of each of Velan Capital Holdings LLC, the general partner of Velan Master, and Velan Capital Management LLC, the general partner of the investment manager of Velan Master, may be deemed to beneficially own the securities owned directly by Velan Master. Mr. Morgan disclaims beneficial ownership of the securities reported herein except to the extent of his pecuniary interest therein, and this report shall not be deemed to be an admission that Mr. Morgan is the beneficial owner of such securities for purposes of Section 16 or for any other purpose.

3. Velan Master purchased 70,012 shares of Series A Preferred Stock pursuant to the terms of the SPA and the Certificate of Designation of Rights, Preferences and Privileges of Series A Convertible Preferred Stock of Heron Therapeutics, Inc., dated August 8, 2025 (the "Certificate of Designation"). The conversion price of the Series A Preferred Stock is $1.50 per share.

4. Pursuant to the terms of the SPA, upon approval of the Stockholder Approval Proposal (as defined in the SPA), all of the outstanding shares of Series A Preferred Stock will automatically convert into shares of Common Stock at the applicable conversion price, plus accrued and unpaid dividends, subject to the terms and conditions set forth in the Certificate of Designation. However, the Series A Preferred Stock shall not be converted if, after giving effect thereto, Velan Master (together with its affiliates) would beneficially own, as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, more than 4.99% of the outstanding shares of Common Stock. Such ownership limitation may be increased upon 61 days' notice to the Issuer.

	/s/ Adam Morgan	08/12/2025
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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FAQ

What did HRTX disclose in this Form 4 filing?

The Form 4 reports that Velan Capital Master Fund LP purchased common stock at $1.50 and 70,012 shares of Series A Convertible Preferred (convertible at $1.50 per share), and that the reporting person sold 69,777 common shares.

How many Series A Preferred shares did Velan Master acquire in the HRTX transaction?

Velan Master purchased 70,012 shares of Series A Convertible Preferred pursuant to the Securities Purchase Agreement.

What is the conversion effect of the Series A Preferred for HRTX?

Each Series A Preferred converts at a conversion price of $1.50, so the 70,012 preferred translate into 700,120 underlying common shares upon automatic conversion conditions described in the filing.

Does the Form 4 indicate any ownership limits for Velan Master after conversion?

Yes. The Series A Preferred will not convert if, after conversion, Velan Master (and its affiliates) would beneficially own more than 4.99% of outstanding common stock, unless that limit is increased after notice.

What beneficial ownership is reported following the HRTX transactions?

The filing reports Velan Master’s indirect beneficial ownership as 8,753,290 shares following the reported transactions.