UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
EnteroMedics, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
29365M208
(CUSIP Number)
Ryan J. York
Davis Wright Tremaine LLP
1201 Third Avenue, Suite 2200
Seattle, WA 98101
(206) 622-3150
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
May 27, 2015
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the following box. x
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 29365M208 |
| 1 | NAMES OF REPORTING PERSONS
Kevin Douglas | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) x
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
United States | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER:
0 | ||||
| 8 | SHARED VOTING POWER:
8,731,364 (1) | |||||
| 9 | SOLE DISPOSITIVE POWER:
0 | |||||
| 10 | SHARED DISPOSITIVE POWER:
10,951,705 (1)(2) | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,951,705 (1)(2) | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
14.2% (1)(2)(3) | |||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN | |||||
| (1) | Kevin Douglas and his wife, Michelle Douglas, hold jointly as the beneficiaries and co-trustees of the K&M Douglas Trust 3,010,852 shares, currently exercisable warrants to purchase up to 252,000 shares at $1.14 per share, 510,000 shares at $2.19 per share and warrants to purchase up to 87,000 shares at $1.90 per share. In addition, Kevin Douglas and Michelle Douglas are co-trustees of the James Douglas and Jean Douglas Irrevocable Descendants’ Trust, which holds 3,456,512 shares, currently exercisable warrants to purchase up to 420,000 shares at $1.14 per share, 850,000 shares at $2.19 per share and currently exercisable warrants to purchase up to 145,000 shares at $1.90 per share. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (2) | Kevin Douglas also has dispositive power with respect to 1,654,341 shares, currently exercisable warrants to purchase up to 168,000 shares at $1.14 per share, 340,000 shares at $2.19 per share and currently exercisable warrants to purchase up to 58,000 shares at $1.90 per share held by the Douglas Family Trust. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (3) | Based on 74,404,378 shares of the issuer’s common stock outstanding as of April 30, 2015, as reported on the issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the Securities and Exchange Commission (the “SEC”) on May 8, 2015. |
| CUSIP No. 29365M208 |
| 1 | NAMES OF REPORTING PERSONS
Michelle Douglas | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) x
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
United States | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER:
0 | ||||
| 8 | SHARED VOTING POWER:
8,731,364 (1) | |||||
| 9 | SOLE DISPOSITIVE POWER:
0 | |||||
| 10 | SHARED DISPOSITIVE POWER:
8,731,364 (1) | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,731,364 (1) | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
11.4% (1)(2) | |||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN | |||||
| (1) | Kevin Douglas and his wife, Michelle Douglas, hold jointly as the beneficiaries and co-trustees of the K&M Douglas Trust 3,010,852 shares, currently exercisable warrants to purchase up to 252,000 shares at $1.14 per share, 510,000 shares at $2.19 per share and warrants to purchase up to 87,000 shares at $1.90 per share. In addition, Kevin Douglas and Michelle Douglas are co-trustees of the James Douglas and Jean Douglas Irrevocable Descendants’ Trust, which holds 3,456,512 shares, currently exercisable warrants to purchase up to 420,000 shares at $1.14 per share, 850,000 shares at $2.19 per share and currently exercisable warrants to purchase up to 145,000 shares at $1.90 per share. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (2) | Based on 74,404,378 shares of the issuer’s common stock outstanding as of April 30, 2015, as reported on the issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the SEC on May 8, 2015. |
| CUSIP No. 29365M208 |
| 1 | NAMES OF REPORTING PERSONS
K&M Douglas Trust (1) | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) x
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
California | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER:
3,859,852 (2) | ||||
| 8 | SHARED VOTING POWER:
0 | |||||
| 9 | SOLE DISPOSITIVE POWER:
0 | |||||
| 10 | SHARED DISPOSITIVE POWER:
3,859,852 (2) | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,859,852 (2) | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
5.2% (2)(3) | |||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO | |||||
| (1) | Kevin Douglas and Michelle Douglas, husband and wife, are beneficiaries and co-trustees. |
| (2) | Includes 3,010,852 shares, currently exercisable warrants to purchase up to 252,000 shares at $1.14 per share, 510,000 shares at $2.19 per share and warrants to purchase up to 87,000 shares at $1.90 per share. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (3) | Based on 74,404,378 shares of the issuer’s common stock outstanding as of April 30, 2015, as reported on the issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the SEC on May 8, 2015. |
| CUSIP No. 29365M208 |
| 1 | NAMES OF REPORTING PERSONS
James Douglas and Jean Douglas Irrevocable Descendants’ Trust (1) | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) x
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
California | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER:
4,871,512 (2) | ||||
| 8 | SHARED VOTING POWER:
0 | |||||
| 9 | SOLE DISPOSITIVE POWER:
4,871,512 (2) | |||||
| 10 | SHARED DISPOSITIVE POWER:
0 | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,871,512 (2) | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
6.4% (2)(3) | |||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO | |||||
| (1) | Kevin Douglas and Michelle Douglas, husband and wife, are co-trustees. |
| (2) | Includes 3,456,512 shares, currently exercisable warrants to purchase up to 420,000 shares at $1.14 per share, 850,000 shares at $2.19 per share and currently exercisable warrants to purchase up to 145,000 shares at $1.90 per share. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (3) | Based on 74,404,378 shares of the issuer’s common stock outstanding as of April 30, 2015, as reported on the issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the SEC on May 8, 2015. |
| CUSIP No. 29365M208 |
| 1 | NAMES OF REPORTING PERSONS
Douglas Family Trust (1) | |||||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS) (a) ¨ (b) x
| |||||
| 3 | SEC USE ONLY
| |||||
| 4 | SOURCE OF FUNDS (SEE INSTRUCTIONS)
PF | |||||
| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) ¨
| |||||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
California | |||||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE VOTING POWER:
2,220,341 (2) | ||||
| 8 | SHARED VOTING POWER:
0 | |||||
| 9 | SOLE DISPOSITIVE POWER:
0 | |||||
| 10 | SHARED DISPOSITIVE POWER:
2,220,341 (2)(3) | |||||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,220,341 (2)(3) | |||||
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) ¨
| |||||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
3.0% (2)(4) | |||||
| 14 | TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO | |||||
| (1) | James E. Douglas Jr. and Jean A Douglas, husband and wife, are co-trustees. |
| (2) | Includes 1,654,341 shares, currently exercisable warrants to purchase up to 168,000 shares at $1.14 per share, 340,000 shares at $2.19 per share and currently exercisable warrants to purchase up to 58,000 shares at $1.90 per share. The warrants are not exercisable if and to the extent that the issuance of shares on such exercise of the warrant would cause the ownership of the holder and its affiliates to exceed 19.99% of the issuer’s common stock. |
| (3) | Kevin Douglas has dispositive power with respect to the securities held by the Douglas Family Trust. |
| (4) | Based on 74,404,378 shares of the issuer’s common stock outstanding as of April 30, 2015, as reported on the issuer’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 filed with the SEC on May 8, 2015. |
Schedule 13D
| ITEM 1. | SECURITY AND ISSUER |
This statement relates to shares of Common Stock (the “Common Stock”) of EnteroMedics, Inc. (the “Issuer”) The principal executive office of the Issuer is located at 2800 Patton Road, St. Paul, Minnesota 55113.
| ITEM 2. | IDENTITY AND BACKGROUND |
The persons filing this statement and the persons enumerated in Instruction C of Schedule 13D and, where applicable, their respective places of organization, general partners, directors, executive officers and controlling persons, and the information regarding them are as follows:
| (a) | Kevin Douglas, Michelle Douglas, K&M Douglas Trust, James Douglas and Jean Douglas Irrevocable Descendants’ Trust and Douglas Family Trust (collectively, the “Filers”). |
| (b) | The business address of the Filers is: |
125 E. Sir Francis Drake Blvd., Suite 400, Larkspur, CA 94939.
| (c) | Present principal occupation or employment of the Filers and the name, principal business and address of any corporation or other organization in which such employment is conducted: |
Kevin Douglas is an active securities and commodities investor and is employed by Douglas Telecommunications, Inc., which has the same business address as the Filers. Michelle Douglas participates in nonprofit fund raising and in assisting Kevin Douglas in his investment activities.
| (d) | During the last five years, none of the Filers has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). |
| (e) | During the last five years, none of the Filers was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. |
| (f) | U.S.A. |
| ITEM 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
The Filers purchased an aggregate of 8,121,705 shares of Common Stock for a total consideration (including brokerage commissions) of $14,014,518 derived from the personal funds of the Filers. The Filers have not purchased any Common Stock with borrowed funds.
| ITEM 4. | PURPOSE OF TRANSACTION |
The Filers acquired their shares of Common Stock for investment purposes because they believed the Common Stock represented an attractive investment. However, they may at any time and from time to time determine to seek to contact the Issuer regarding means of increasing stockholder value.
Prior to the date hereof, the Filers had on file with the Securities and Exchange Commission a Schedule 13G with respect to their beneficial ownership of Common Stock, initially filed with the SEC on December 17, 2010. The Filers are filing this Schedule 13D in order to remove any possible impediment to contacting the Issuer regarding means of increasing stockholder value.
In addition to the foregoing matters, the Filers intend to review their holdings in the Issuer on a continuing basis. Depending upon, among other things, current and anticipated future trading prices for the Issuer’s securities, the financial condition, results of operations and prospects of the Issuer and its businesses, general economic, market and industry conditions, and the Filers’ overall investment portfolio, strategic objectives and financial condition, the Filers may from time to time consider a number of possible strategies intended to enhance the value of their investment in the Issuer, enhance the value of the Issuer’s assets or enhance the value of the Filers’ assets through the involvement of the Issuer, or other extraordinary matters relating to the Issuer, including, among other things: (i) continued ownership of the Issuer’s equity currently beneficially owned by the Filers; (ii) acquiring additional interests in or disposing of some or all of its interests in the Issuer in the open market, in privately negotiated transactions or otherwise; (iii) a sale or transfer of a material amount of assets of the Issuer and/or any of its affiliates; (iv) proposing or seeking to change or take control of the Issuer, including but not limited to through solicitation of proxies to elect the nominees of the Filers’ affiliates to the Board of Directors of the Issuer, changing the Issuer’s certificate of incorporation or by-laws, or otherwise effecting an extraordinary corporate transaction such as a spin-off, acquisition, merger, tender offer, exchange offer, recapitalization, reorganization or liquidation involving the Issuer or any of its subsidiaries and/or affiliates or assets; or (v) proposing or effecting any other transaction or matter that would constitute or result in any of the transactions, matters or effects enumerated in Item 4(a)-(j) of Schedule 13D.
There can be no assurance that the Filers will pursue any of the matters set forth above. Moreover, there can be no assurance that the Filers will or will not develop any alternative plan or proposal with respect to any of the foregoing matters or take any particular action or actions with respect to some or all of their holdings in the Issuer, or as to the timing of any such matters should they be so pursued by the Filers. The Filers reserve the right, at any time and in each Filer’s sole discretion, to take or refrain from taking any of the actions set forth above.
| ITEM 5. | INTEREST IN SECURITIES OF THE ISSUER |
The beneficial ownership of the Common Stock by each Filer at the date hereof is reflected on that Filer’s cover page.
There were no transactions effected by the Filers in the Common Stock within the past sixty (60) days.
| ITEM 6. | CONTRACTS, AGREEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. |
Other than the relationships mentioned above and except for the Joint Filing Agreement, dated May 27, 2015, filed as an exhibit to this Schedule 13D, to the knowledge of the Filers, none of the Filers is party to any other contracts, arrangements, understandings or relationships with respect to any securities of the Issuer, including but not limited to the transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option agreements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.
| ITEM 7. | MATERIALS TO BE FILED AS EXHIBITS |
| 7.1 | Agreement Regarding Joint Filing of Statement on Schedule 13D or 13G, dated May 27, 2015. | |
| 7.2 | Limited Power of Attorney, dated December 16, 2010 (incorporated by reference to Exhibit A to the Filers Schedule 13G, filed with the Securities and Exchange Commission on December 17, 2010). | |
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| Date: May 27, 2015 | *Kevin Douglas | |||||
| KEVIN DOUGLAS | ||||||
| Date: May 27, 2015 | *Michelle Douglas | |||||
| MICHELLE DOUGLAS | ||||||
| Date: May 27, 2015 | *James E. Douglas, III | |||||
| JAMES E. DOUGLAS, III | ||||||
| K&M DOUGLAS TRUST | ||||||
| Date: May 27, 2015 | *Kevin Douglas | |||||
| By: | Kevin Douglas | |||||
| Title: | Trustee | |||||
| Date: May 27, 2015 | *Michelle Douglas | |||||
| By: | Michelle Douglas | |||||
| Title: | Trustee | |||||
| JAMES DOUGLAS AND JEAN DOUGLAS | ||||||
| IRREVOCABLE DESCENDANTS’ TRUST | ||||||
| Date: May 27, 2015 | *Kevin Douglas | |||||
| By: | Kevin Douglas | |||||
| Title: | Trustee | |||||
| Date: May 27, 2015 | *Michelle Douglas | |||||
| By: | Michelle Douglas | |||||
| Title: | Trustee | |||||
| DOUGLAS FAMILY TRUST | ||||||
| Date: May 27, 2015 | *James E. Douglas, Jr. | |||||
| By: | James E. Douglas, Jr. | |||||
| Title: | Trustee | |||||
| Date: May 27, 2015 | *Jean A. Douglas | |||||
| By: | Jean A. Douglas | |||||
| Title: | Trustee | |||||
| *Eileen Wheatman |
| /s/ Eileen Wheatman |
| By: Eileen Wheatman |
| Attorney-in-Fact |
Exhibit 7.1
AGREEMENT REGARDING JOINT FILING
OF STATEMENT ON SCHEDULE 13D
Each of the undersigned hereby acknowledges and agrees, pursuant to the provisions of Rule 13d-1(k)(1) promulgated under the Securities Exchange Act of 1934, as amended, that the Schedule 13D to which this Agreement is attached as an Exhibit, and any amendments thereto, with respect to the beneficial ownership of the undersigned of shares Common Stock of EnteroMedics, Inc., will be filed with the Securities and Exchange Commission jointly on behalf of the undersigned.
| Dated: |
May 27, 2015 | KEVIN DOUGLAS | ||||||
| *Kevin Douglas | ||||||||
| MICHELLE DOUGLAS | ||||||||
| *Michelle Douglas | ||||||||
| K&M DOUGLAS TRUST | ||||||||
| *Kevin Douglas | ||||||||
| By: | Kevin Douglas | |||||||
| Title: | Trustee | |||||||
| *Michelle Douglas | ||||||||
| By: | Michelle Douglas | |||||||
| Title: | Trustee | |||||||
| JAMES DOUGLAS AND JEAN DOUGLAS | ||||||||
| IRREVOCABLE DESCENDANTS’ TRUST | ||||||||
| *Kevin Douglas | ||||||||
| By: | Kevin Douglas | |||||||
| Title: | Trustee | |||||||
| *Michelle Douglas | ||||||||
| By: | Michelle Douglas | |||||||
| Title: | Trustee | |||||||
| DOUGLAS FAMILY TRUST | ||||||||
| * James E. Douglas, Jr. | ||||||||
| By: | James E. Douglas, Jr. | |||||||
| Title: | Trustee | |||||||
| * Jean A. Douglas | ||||||||
| By: | Jean A. Douglas | |||||||
| Title: | Trustee | |||||||
| *By: | /s/ Eileen Wheatman | |
| Eileen Wheatman | ||
| Attorney-in-fact |