Filing Details

Daniel Radden

c/o Armistice Capital, LLC

510 Madison Avenue

7^th Floor

New York, NY 10022

Telephone Number: 212-231-4930

(Name, Address and Telephone Number of Person Authorized to Receive

Notices and Communications)

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The name of the issuer is ReShape Lifesciences Inc., a Delaware corporation (the "Issuer"). The address of the Issuer's principal executive offices is 1001 Calle Amanecer, San Clemente, California 92673. This Amendment No. 3 to Schedule 13D relates to the Issuer's Common Stock, $0.001 par value per share (collectively, the "Shares").

Armistice Capital is an investment adviser registered with the Securities and Exchange Commission (the “SEC”) that is principally engaged in the business of providing investment management services to private investment vehicles, including the Master Fund. The principal business address of Armistice Capital is 510 Madison Avenue, 7^th Floor, New York, New York 10022.

The Master Fund is principally engaged in the business of investing in securities. The principal business address of the Master Fund is: c/o dms Corporate Services Ltd., 20 Genesis Close, P.O. Box 314, Grand Cayman KY1-1104, Cayman Islands. The board of directors of the Master Fund consists of Steven Boyd, Kevin A. Phillip and Gregory S. Bennett.

Steven Boyd is the managing member of Armistice Capital and a director of the Master Fund. Mr. Boyd’s business address is 510 Madison Avenue, 7^th Floor, New York, New York 10022.

On March 25, 2020, the Issuer entered into a credit agreement (the “Credit Agreement”) with the Master Fund pursuant to which the Issuer borrowed from the Master Fund a principal amount of $2.5 million, with the option to borrow up to an additional $1.0 million pursuant to delayed draw term loans. The loans outstanding under the Credit Agreement mature on September 24, 2020 and bear interest at a rate per annum equal to the LIBOR rate plus 2.5%. Further, under the terms of the Credit Agreement, the Master Fund agreed to exercise warrants it currently holds to purchase 5,085,834 Shares with a current exercise price of $0.12 per Share by no later than April 15, 2020.

In connection with the Credit Agreement, the Issuer and its wholly-owned subsidiary, ReShape Medical LLC (“ReShape Medical”), entered into a guarantee and collateral agreement with the Master Fund dated March 25, 2020 (the “Guarantee and Collateral Agreement”) pursuant to which the Issuer and ReShape Medical granted to the Master Fund a security interest in substantially all of their respective assets as security for the Issuer’s obligations under the Credit Agreement.

On March 25, 2020, the Issuer also issued to the Master Fund series G warrants (the “Series G Warrants”) to purchase an aggregate of 1,200,000 Shares pursuant to the Issuer’s Series G Common Stock Purchase Warrant (the “Series G Common Stock Purchase Warrant”).

In connection with the issuance to the Master Fund of the Series G Warrants, the Issuer and the Master Fund entered into a registration rights agreement dated March 25, 2020 (the “Registration Rights Agreement”) pursuant to which the Issuer agreed to file a resale registration statement for the Shares underlying the Series G Warrants within 60 days and to use its best efforts to cause such resale registration statement to be declared effective within 90 days, or, in the event of a “full review” by the SEC, within 120 days.  

On March 31, 2020, the Issuer and the Master Fund entered into an amendment to the Credit Agreement (the “Credit Agreement Amendment”) relating to the Issuer’s payment of fees, reasonable costs and reasonable out-of-pocket expenses due and payable under the Credit Agreement and other related loan documents.

The Issuer and the Master Fund also entered into an amendment to Series G Common Stock Purchase Warrant on March 31, 2020 (the “Series G Warrant Amendment”) to, among other things, provide that the exercise price per Share of the Series G Warrants is $3.70.

The foregoing was a summary of certain material terms of the: (i) Credit Agreement; (ii) Guarantee and Collateral Agreement; (iii) Series G Common Stock Purchase Warrant; (iv) Registration Rights Agreement; (v) Credit Agreement Amendment; and (vi) Series G Warrant Amendment. The foregoing descriptions are not, and do not purport to be, complete and, except as otherwise described above, are qualified in their entirety by reference to the full text of the forms of those documents, which have been filed as Exhibits B, C, D, E, F and G, respectively, and are incorporated herein by reference.

The Reporting Persons purchased the Shares for investment in the ordinary course of their investment activities based on the Reporting Persons’ belief that the Shares, when purchased, were undervalued and represented an attractive investment opportunity. The Reporting Persons intend to review their investment in the Issuer on a continuing basis. Depending on various factors including, without limitation, the Issuer’s financial position, the price levels of the Shares, conditions in the securities markets and general economic and industry conditions, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, participating on the Issuer’s board of directors (the “Board”), engaging in communications with management and/or the Board, engaging in discussions with stockholders of the Issuer and others about the Issuer and the Reporting Persons’ investment, reshaping the Issuer's corporate strategy, recommending business development transactions, proposing changes to management, operations and the structure of the Board (including the composition of the Board), purchasing additional Shares, selling some or all of their Shares, engaging in short selling of or any hedging or similar transaction with respect to the Shares, or changing their intention with respect to any and all matters referred to in subparagraphs (a) - (j) of Item 4 of Schedule 13D.

Except as otherwise set forth herein, the Reporting Persons do not have any present plans or proposals which would relate to, or result in, the matters set forth in subparagraphs (a) – (j) of Item 4 of Schedule 13D. However, subject to market conditions and in compliance with applicable securities laws, the Reporting Persons reserve the right, at a later date, to effect one or more of such changes or transactions in the number of Shares they may be deemed to beneficially own in open-market or privately negotiated transactions, on such terms and at such times as the Reporting Persons may deem advisable.

As of the date hereof, each of the Reporting Persons may be deemed to be the beneficial owner of 11,747,502 Shares, constituting 98.8% of the Shares, based upon 11,889,628 Shares outstanding as of the date hereof, as adjusted for warrants of the Issuer beneficially owned by the Reporting Persons. Each of the Reporting Persons has the sole power to vote or direct the vote of 0 Shares and the shared power to vote or direct the vote of 11,747,502 Shares. Each of the Reporting Persons has the sole power to dispose or direct the disposition of 0 Shares and the shared power to dispose or direct the disposition of 11,747,502 Shares.

Other than the Series G Warrants acquired by the Master Fund as described in Item 4 above, there have been no transactions in the Shares by the Reporting Persons during the past sixty days.

(e)

N/A

The information set forth in Item 4 above is incorporated by reference in its entirety in this Item 6. The Reporting Persons do not have any contract, arrangement, understanding or relationship with any person with respect to securities of the Issuer that is not described herein or in a prior Schedule 13D filed by the Reporting Persons in respect of the Issuer.

Name: Steven Boyd

Title: Managing Member

Name: Steven Boyd

Title: Director

Name: Steven Boyd

Title: Managing Member

Name: Steven Boyd

Title: Director