8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 3, 2019

GI DYNAMICS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-55195	84-1621425
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

P.O. Box 51915

Boston, MA 02205

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (781) 357-3300

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, par value US$0.01	GID.ASX	Australia Securities Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Item 7.01 Regulation FD Disclosure.

On October 3, 2019, GI Dynamics, Inc. (the “Company”) announced that it issued 157,480,314 CHESS Depositary Interests (“CDIs”) (subject to the effect of any rounding), which represent approximately 3,149,607 shares of the Company’s common stock, par value $0.01 per share, to Crystal Amber Fund Limited (“Crystal Amber”) in connection with the exercise of warrants in the aggregate amount of $2,000,000 at an exercise price of US$0.0127 per CDI (the “Warrants”). The Warrants were exercised pursuant to, and in accordance with, that certain Securities Purchase Agreement, dated August 21, 2019, by and between the Company and Crystal Amber, as reported on the Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on August 22, 2019. A copy of the announcement is furnished herewith for the purposes of Regulation FD as Exhibit 99.1.

On October 3, 2019, the Company made available a newsletter on its website, which will from time to time be updated to reflect the Company’s progress in developing EndoBarrier for patients with type 2 diabetes and obesity. A copy of the newsletter is furnished herewith for the purposes of Regulation FD as Exhibit 99.2.

The information set forth in this Item 7.01, including Exhibits 99.1 and 99.2, is being furnished pursuant to Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly provided by specific reference in such a filing.

By filing this Current Report on Form 8-K and furnishing the information in this Item 7.01, the Company makes no admission as to the materiality of Item 7.01 in this report or the announcement and newsletter attached hereto as Exhibits 99.1 and 99.2, respectively. The information contained in the announcement and newsletter are summaries that are intended to be considered in the context of the Company’s filings with the Securities and Exchange Commission (the “SEC”) and other public announcements that the Company makes, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this Item, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.

The Company cautions you that the announcement and newsletter attached hereto as Exhibits 99.1 and 99.2, respectively, contain forward-looking statements. These forward-looking statements are based on our management’s current estimates and expectations of future events as of the date of the date of the announcement and newsletter, respectively. Furthermore, the estimates are subject to several risks and uncertainties that could cause actual results to differ materially and adversely from those indicated in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks associated with our ability to continue to operate as a going concern, our ability to maintain compliance with our obligations under the loan documents with Crystal Amber Fund Limited, obtaining and maintaining regulatory approvals required to market and sell our products; obtaining funding from third parties; the consequences of stopping the ENDO trial and the possibility that future clinical trials will not be successful or confirm earlier results; the timing and costs of clinical trials; the timing of regulatory submissions; the timing, receipt and maintenance of regulatory approvals; the timing and amount of other expenses; the timing and extent of third-party reimbursement; risks related to excess inventory; and risks related to assumptions regarding the size of the available market, the benefits of our products, product pricing, timing of product launches, future financial results and other factors, including those described in our filings with the SEC. Given these uncertainties, one should not place undue reliance on these forward-looking statements. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, unless we are required to do so by law.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Announcement, dated October 3, 2019 (EST).
99.2	Newsletter, dated October 3, 2019 (EST).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	GI DYNAMICS, INC.
Dated: October 3, 2019	/s/ Charles Carter
	Charles Carter
	Chief Financial Officer

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EX-99.1

EXHIBIT 99.1

 

 

Exercise of Tranche 2 Warrants

by Crystal Amber and Appendix 3B

BOSTON and SYDNEY — 4 October 2019 — GI Dynamics^® Inc. (ASX:GID) (Company or GI Dynamics), a medical device company that is developing EndoBarrier^® for patients with type 2 diabetes and obesity, is pleased to announce that further to the announcements made by the Company on 22 August 2019 and 29 August 2019 with respect to the Company’s approximate US$10,000,000 financing arrangement with Crystal Amber Fund Limited (Crystal Amber), it has received from Crystal Amber the relevant exercise notices and the relevant funds for the exercise of those warrants that were to be exercised by it on or around 30 September 2019 (Tranche 2 Warrants).

As a result of the exercise of the Tranche 2 Warrants, the Company confirms it has allotted 157,480,314 CHESS Depositary Interests (CDIs) (subject to the effect of any rounding) to Crystal Amber for a total consideration of US$2,000,000 (with each warrant having an exercise price of US$0.0127 per CDI). Further details in respect of the exercise of the Tranche 2 Warrants are set out in the attached Appendix 3B.

The funds raised from the exercise of the Tranche 2 Warrants will be used by the Company for general working capital purposes, to assist with the initiation of patient enrollment for STEP-1 (United States) and I-STEP (India with Apollo Sugar) clinical studies and for continuing work towards securing a CE Mark for EndoBarrier.

 

 

Boston, United States Sydney, Australia 4 October 2019 AEST

About GI Dynamics GI Dynamics®, Inc. (ASX:GID) is the developer of EndoBarrier®, the first endoscopically-delivered device therapy for the treatment of type 2 diabetes and obesity. EndoBarrier is not approved for sale and is limited by federal law to investigational use only. EndoBarrier is subject to an Investigational Device Exemption by the FDA in the United States and is entering concurrent pivotal trials in the United States and India. Founded in 2003, GI Dynamics is headquartered in Boston, Massachusetts. For more information please visit www.gidynamics.com. Forward-Looking Statements This announcement may contain forward-looking statements. These statements are based on GI Dynamics management’s current estimates and expectations of future events as of the date of this announcement. Furthermore, the estimates are subject to several risks and uncertainties that could cause actual results to differ materially and adversely from those indicated in or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks associated with our ability to continue to operate as a going concern; our ability to obtain stockholder approval of the conversion feature of the August 2019 Note and issuance of the August 2019 Warrant, our ability to raise sufficient additional funds to continue operations and to conduct the planned pivotal trial of EndoBarrier in the United States (STEP-1); our ability to execute STEP-1 under FDA’s Investigational Device Exemption; our ability to enlist clinical trial sites and enroll patients in accordance with STEP-1; the risk that the FDA stops STEP-1 early as a result of the occurrence of certain safety events or does not approve an expansion of STEP-1; our ability to enroll patients in accordance with I-STEP; our ability to secure a CE Mark; our ability to maintain compliance with our obligations under our existing convertible note and warrant agreements executed with Crystal Amber, including our obligations to make payment on the Note that is due on 31 March 2020 and our ability to restructure the terms of the Note with Crystal Amber that is due on 31 March 2020 if we are unable to raise sufficient funds to enable us to fully repay such Note when due; obtaining and maintaining regulatory approvals required to market and sell our products; the possibility that future clinical trials will not be successful or confirm earlier results; the timing and costs of clinical trials; the timing of regulatory submissions; the timing, receipt and maintenance of regulatory approvals; the timing and amount of other expenses; the timing and extent of third-party reimbursement; intellectual-property risk; risks related to excess inventory; risks related to assumptions regarding the size of the available market; the benefits of our products; product pricing; timing of product launches; future financial results; and other factors, including those described in our filings with the U.S. Securities and Exchange Commission.

Investor Relations United States: Janell Shields +1 (781) 357-3280 investor@gidynamics.com

Given these uncertainties, one should not place undue reliance on these forward-looking statements. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, unless we are required to do so by law. ###

EX-99.2

EXHIBIT 99.2

	EndoBarrier® Update
	Fall 2019 Newsletter

To the clinicians who have worked so hard to support EndoBarrier® and who have been so patient with us, I want to say how much we appreciate your efforts over the last few years. We would not be in the positive position we are in now without your constant support and continued progress on your clinical trials, registry, and publication efforts.

Thank you.

I am pleased to update you that we are on our way towards achieving a number of critical milestones at GI Dynamics.

With renewed financial support from our largest shareholder, we have initiated enrollment in the groundbreaking STEP-1 pivotal trial of EndoBarrier in the United States. This study encompasses the traditional type 2 diabetes and obesity endpoints and captures additional data such as cardiovascular risk markers and insulin sensitivity. In addition, this study also will measure liver fat, liver stiffness, and CKD markers- for the first time for a pivotal trial in the United States. The STEP-1 trial will also gather data for future biomarker development and microbiome analysis that we expect will lead to significant future breakthroughs.

Most notably for our clinicians in Europe and the Middle East, we are highly focused on gaining the EndoBarrier CE Mark. We hope to have our CE Mark in the first half of 2020 and appreciate your support as we prepare the necessary documentation and work through the approval process with our notified body.

Finally, we are working closely with Apollo Sugar, which is the joint venture formed by Apollo Hospitals Group and Sanofi for the treatment of diabetes and related comorbidities. Apollo Hospital is the largest and highest-rated private hospital system in India and has been a phenomenal partner as we jointly prepare to initiate the I-STEP pivotal trial in India. This study mirrors many of the endpoints we will gather in the U.S. STEP-1 study and is anticipated to begin enrolling in the fourth quarter of 2019.

 

STEP-1 Investigator Meeting, April 2019

The team at GI Dynamics is dedicated to helping you treat your patients suffering from type 2 diabetes, obesity, and associated metabolic disorders.

We look forward to updating you on our progress……and again, Thank You!

/s/ Scott Schorer

Scott Schorer

President & CEO

GI Dynamics

GI Dynamics Newsletter: Fall 2019

ENDOBARRIER® UPDATE

Financial News

On August 21, 2019, GI Dynamics announced up to a US$10 Million financing with Crystal Amber Fund, the company’s largest shareholder. Funds will be used to initiate patient enrollment for STEP-1 (United States) and I-STEP (India), as well as continuing to work towards gaining the EndoBarrier CE Mark.

Launching Clinical Trials

United States: STEP-1

GI Dynamics has initiated Stage 1 enrollment of the STEP-1 clinical study of EndoBarrier in the United States. Enrollment will occur from Q3 2019 into Q1 2020 at the following five (5) leading sites:

1.	Brigham & Women’s Hospital	Boston, Massachusetts
2.	University of Michigan	Ann Arbor, Michigan
3.	Thomas Jefferson University	Philadelphia, Pennsylvania
4.	Baylor College of Medicine	Houston, Texas
5.	Surgical Specialists of Louisiana	New Orleans, Louisiana

The STEP-1 pivotal trial is led by PI Christopher Thompson, M.D. of Brigham & Women’s Hospital. Stage 1 of the study will consist of 50 EndoBarrier implant procedures and ~ 17 sham control procedures and has started enrolling patients. EndoBarrier implants will be removed twelve months following implant, targeted to be no later than Q1 2021. GI Dynamics will then work with the FDA to gain approval for Stage 2 of the STEP-1 clinical trial.

India: I-STEP

GI Dynamics has partnered with Apollo Sugar to run the clinical trial of EndoBarrier in India: I-STEP. Apollo Sugar is a division of Apollo Hospitals Group (Apollo) focused on the treatment of metabolic disorders and operates an integrated network of centers of excellence for diabetes, obesity and endocrinology and is a collaboration between Apollo Health & Lifestyle Limited and Sanofi. Apollo is the largest and highest-rated private hospital system in India. Apollo Sugar is currently working to secure Ethics Committee (EC) approval for 5 clinical sites throughout India.

Patient enrollment is planned to take place between Q4 2019 and Q2 2020. Implant removal is expected to be complete in Q2 2021.

GI Dynamics Newsletter: Fall 2019

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ENDOBARRIER® UPDATE

Product Launch Activities

CE Mark Plans

● GI Dynamics has been diligently working towards regaining the EndoBarrier CE Mark to support a relaunch in Europe and the Middle East.

● The team is relying heavily on clinician input and data from multiple investigator initiated clinical trials, registry reports and analyses.

● GI Dynamics is working towards a Q1 2020 goal of receiving the EndoBarrier CE Mark.

The GI Dynamics team greatly appreciates all the support and time clinicians have provided in support of this line of effort.

Investigator Meeting: STEP-1

In March 2019, GI Dynamics held an Investigator Meeting for all United States clinical sites at the 7th Annual Flexible Endoscopy Surgery and Bariatric Endoscopy Course (FES).

 

GI Dynamics Newsletter: Fall 2019

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ENDOBARRIER® UPDATE

Product Launch Activities (continued)

Commercialization

United States: GI Dynamics will submit for FDA approval in 2023 with U.S. commercialization slated for 2025.

Europe and Middle East: CE Mark expected in the first half of 2020.

India: India’s commercialization of EndoBarrier with Apollo Sugar JV is scheduled for late 2021 or early 2022.

HOW ENDOBARRIER WORKS

New EndoBarrier Overview Video Released

Milestones to Note

● August 2018: FDA approved GI Dynamics Investigational Device Exemption for the pivotal trial of EndoBarrier conditioned upon IRB approval

● February 2019: Western IRB provided approval

● March 2019: UK National Health Service EndoBarrier Service Releases Final Data of One- Year Outcome

● March 2019: Association of British Clinical Diabetologists Releases Results of EndoBarrier Obstructive Sleep Apnea Study

Team Additions

GI Dynamics has had the pleasure of growing its Scientific Advisory Board (SAB) and Executive Team in 2019.

	Leadership Team		Scientific Advisory Board
	Stephen Linhares joins as VP of Clinical and Regulatory Affairs		Allon Friedman M.D. of Indiana University School of Medicine with a focus on chronic kidney disease
	Paul Pelletier joins as Director of Quality Assurance		Judith Korner, M.D. Ph.D., of Columbia University Medical Center with a focus on endocrinology and metabolism
	Charles Carter joins as Chief Financial Officer		Steven Opal, M.D. of Brown University with a focus on liver abscess

Contact GI Dynamics

Scott Schorer	Janell Shields
President & CEO	Manager, Marketing & IR
sschorer@gidynamics.com	jshields@gidynamics.com

GI Dynamics Newsletter: Fall 2019

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