Acutus Medical (AFIB) SC 13DAcutus Medical / Flynn James E ownership change

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

[Rule 13d-101]

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO § 24.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO § 240.13D-2(a)

(Amendment No. )*

Acutus Medical, Inc.

(Name of Issuer)

Common Stock, par value $0.001 per share

(Title of Class of Securities)

005111109

(CUSIP Number)

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

August 10, 2020

(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 ☐.

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.

(Continued on following pages)
(Page 1 of 16 Pages)

* 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 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 the Act but shall be subject to all other provisions of the Act (however, see the Notes).

SCHEDULE 13D

(1) Comprised of 2,758,000 shares of common stock and 402,998 shares of common stock underlying warrants held by Deerfield Private Design Fund III, L.P.

SCHEDULE 13D

(2) Comprised of 2,758,000 shares of common stock and 402,998 shares of common stock underlying warrants.

SCHEDULE 13D

(3) Comprised of 1,583,802 shares of common stock and 31,116 shares of common stock underlying warrants held by Deerfield Partners, L.P.

SCHEDULE 13D

(4) Comprised of 1,583,802 shares of common stock and 31,116 shares of common stock underlying warrants.

SCHEDULE 13D

(5) Comprised of an aggregate of 4,341,802 shares of common stock and 434,114 shares of common stock underlying warrants held by Deerfield Partners, L.P. and Deerfield Private Design Fund III, L.P.

SCHEDULE 13D

(6) Comprised of an aggregate of 4,341,802 shares of common stock and 434,114 shares of common stock underlying warrants held by Deerfield Partners, L.P. and Deerfield Private Design Fund III, L.P.

This Schedule 13D is filed by (i) Deerfield Mgmt III, L.P. (“Deerfield Mgmt III”), (ii) Deerfield Private Design Fund III, L.P. (“Deerfield Private Design Fund III”), (iii) Deerfield Mgmt, L.P. (“Deerfield Mgmt”), (iv) Deerfield Partners, L.P. (“Deerfield Partners”), (v) Deerfield Management Company, L.P. (“Deerfield Management”) and (vi) James E. Flynn, a natural person (“Flynn” and collectively with Deerfield Mgmt III, Deerfield Private Design Fund III, Deerfield Mgmt, Deerfield Partners and Deerfield Management, the “Reporting Persons”), with respect to the common stock of Acutus Medical, Inc. Deerfield Private Design Fund III and Deerfield Partners are collectively referred to herein as the “Funds”).

This Statement on Schedule 13D relates to the shares of common stock, par value $0.001 per share (the “Common Stock”), of Acutus Medical, Inc., a Delaware corporation (the “Company”). The address of the Company's principal executive offices is 2210 Faraday Ave, Suite 100, Carlsbad, California 92008.

Other than as set forth above in this Item 2(e), during the last five years, none of the Reporting Persons, nor, to the best of each of the Reporting Person’s knowledge, any of the persons listed on Schedule A attached hereto, has been 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.

The Reporting Persons have entered into a Joint Filing Agreement, a copy of which is attached hereto as Exhibit 99.1.

Prior to the Company’s initial public offering (the “IPO”), Deerfield Private Design Fund III and Deerfield Special Situations Fund, L.P. (“DSS”), an investment fund managed by Deerfield Management and Deerfield Partners’ predecessor-in-interest with respect to the securities reported herein as beneficially owned by it, participated in debt and equity financings involving the Company, as well as privately-negotiated transactions involving the Company’s capital stock and warrants, as described below.

On July 28, 2020, the Company effected a 1-for-9.724 reverse stock split of its common stock and preferred stock (the “Pre-IPO Reverse Split”). All references in this Schedule 13D to Common Stock, preferred stock, warrants to purchase Common Stock and warrants to purchase preferred stock have been adjusted to reflect the effects of the Pre-IPO Reverse Split.

In March 2016, Deerfield Private Design Fund III acquired 749,988 shares of the Company’s Series C convertible preferred Stock (“Series C Preferred Stock”) from the Company for an aggregate purchase price of approximately $12,500,000.

In June 2018, Deerfield Private Design Fund III provided $4,750,000 of debt financing to the Company in exchange for $4,750,000 aggregate principal amount of the Company’s convertible notes (the “2018 Convertible Notes”) and warrants (the “Common Stock Warrants”) to purchase 161,886 shares of Common Stock. In June 2019, Deerfield Private Design Fund III provided an additional $7,000,000 of debt financing to the Company in exchange for the Company’s convertible notes (the “2019 Convertible Notes”). The 2018 Convertible Notes and 2019 Convertible Notes, and accrued interest of $493,973, held by Deerfield Private Design Fund III were converted into 392,356 shares and 420,741 shares of Series D convertible preferred stock (“Series D Preferred Stock”), respectively, in August 2019.

In May 2019, Deerfield Private Design Fund III provided a $20,000,000 term loan to the Company and, in connection therewith, the Company issued warrants to purchase 209,996 shares of Series C Preferred Stock to Deerfield Private Design Fund III, which warrants were subsequently converted into warrants to purchase 209,996 shares of Series D Preferred Stock (the “Series D Warrants”).

In September 2019, Deerfield Private Design Fund III and DSS entered into a privately negotiated transaction with an unaffiliated third party (the “Secondary Transaction”). Pursuant to the Secondary Transaction, each of Deerfield Private Design Fund III and DSS acquired 449,992 shares of Series C Preferred Stock, 189,366 shares of Series D Preferred Stock and warrants to purchase 31,116 shares of Common Stock for an aggregate purchase price of $5,325,000.

Effective as of January 1, 2020, DSS contributed all Company securities held by it to Deerfield Partners in connection with the consolidation of DSS and Deerfield Partners (the “Fund Consolidation Transaction”). Deerfield Partners issued limited partnership interests to certain DSS investors in exchange for such shares. 

On August 10, 2020, in connection with the closing of the IPO, each outstanding share of Series C Preferred Stock and each outstanding share of Series D Preferred Stock automatically converted into one share of Common Stock (after giving effect to the Pre-IPO Reverse Split). The number of shares of Common Stock acquired by the Reporting Persons upon such conversion was:

In addition, upon the closing of the IPO, the Series D Warrants held by each of Deerfield Partners and Deerfield Private Design Fund III became exercisable for like number of shares of Common Stock in accordance with their terms.

In connection with the IPO, Deerfield Partners and Deerfield Private Design Fund III acquired 944,444 and 555,556 shares of Common Stock, respectively, for $18.00 per share. The aggregate purchase price paid by Deerfield Private Design Fund III and Deerfield Partners for such shares was $16,999,992 and $10,000,008, respectively.

Except as otherwise indicated herein, Deerfield Private Design Fund III and Deerfield Partners utilized their respective working capital to purchase the shares of Common Stock reported herein. Shares of Common Stock beneficially owned by the Reporting Persons are or may be held from time to time by the applicable Fund in margin accounts established with their respective brokers or banks, and a portion of the purchase price for the Common Stock may have been obtained through margin borrowing. Common Stock positions held in margin accounts may be pledged as collateral security for the repayment of debit balances in the margin accounts.

The information set forth in Items 3 and 6 is incorporated herein by reference.

The Reporting Persons have acquired the shares reported herein for investment purposes. Andrew ElBardissi, an employee of Deerfield Management, was appointed to serve on the Company’s board of directors prior to the IPO and continues to serve in such capacity.

Depending on various factors and subject to the obligations described herein, the Reporting Persons may take such actions with respect to their investments in the Company as they deem appropriate, including, without limitation, purchasing additional shares of Common Stock or other financial instruments related to the Company or selling some or all of their beneficial or economic holdings, engaging in hedging or similar transactions with respect to the securities relating to the Company and/or otherwise changing their intention with respect to any and all matters referred to in Item 4 of Schedule 13D.

Flynn is the managing member of the general partner of each of Deerfield Mgmt, Deerfield Mgmt III and Deerfield Management.   Deerfield Mgmt III is the general partner of Deerfield Private Design Fund IIII and Deerfield Mgmt is the general partner of Deerfield Partners. Deerfield Management is the investment manager of the Funds.

(c) Except as set forth in Items 3, 4 and 6 of this Schedule 13D, no Reporting Person has effected any transactions in the Common Stock during the past 60 days.

(d) Not applicable

(e) Not applicable.

The Common Stock Warrants are governed by the terms of a Warrant to Purchase Shares of Common Stock of the Company, originally issued as of June 7, 2018 (the “2018 Warrant Agreement”), executed by the Company in favor of the holders thereof. Pursuant to the 2018 Warrant Agreement, each holder of a Common Stock Warrant is entitled to purchase the number of shares of Common Stock set forth therein at an exercise price of $0.97 per share (on an adjusted basis, giving effect to the Pre-IPO Reverse Split), subject to adjustment as described therein, at any time prior to the earliest of (i) 5:00 p.m., Pacific time, on June 7, 2028, (ii) an acquisition of the Company by another entity that results in a change of control of the Company and (iii) a sale, lease or other disposition of substantially all of the assets of the Company and its subsidiaries taken as a whole (other than to a wholly-owned subsidiary of the Company).

The Series D Warrants are governed by the terms of the Warrant, dated as of May 20, 2019 (the “2019 Warrant”), executed by the Company in favor of the holders thereof. Pursuant to the 2019 Warrant, each holder is entitled to purchase the number of shares of Common Stock set forth therein at a price of $16.67 per share (on an adjusted basis, giving effect to the Pre-IPO Reverse Split), subject to adjustment as described therein, at any time prior to 5:00 p.m., New York City time, on May 20, 2029. The 2019 Warrant also provides that the holders thereof, including Deerfield Private Design Fund III, is entitled to the benefits of the Investors’ Rights Agreement (as defined below).

The foregoing descriptions of the 2018 Warrant Agreement and the 2019 Warrant are qualified in their entirety by reference to the full text of the 2018 Warrant Agreement and the 2019 Warrant, the forms of which is attached (or incorporated by reference) as Exhibits 1 and 2 hereto, respectively.

Investors’ Rights Agreement

Deerfield Private Design Fund III and Deerfield Partners are each a party to that certain Amended and Restated Investors’ Rights Agreement, dated as of June 12, 2019, by and among the Company and the investors party thereto (as amended from time to time, the “Investors’ Rights Agreement”). The Investors’ Rights Agreement provides the investors party thereto, including Deerfield Private Design Fund III and Deerfield Partners, with certain registration rights. In particular, at any time beginning six months following the effective date of the IPO, the holders of 50% or more of the then-outstanding Registrable Securities (as defined in the Investors’ Rights Agreement) may make a written request that the Company register some or all of their Registrable Securities, subject to certain specified conditions and exceptions, including that the aggregate gross offering price of such offering is anticipated to be at least $20,000,000. The Company is obligated to effect up to two such demand registrations.

Pursuant to the Investors’ Rights Agreement, at any time after the Company is eligible to use Form S-3 under the Securities Act of 1933, and subject to limitations and conditions specified in the Investors’ Rights Agreement, the holders of 40% or more of the Registrable Securities may make a written request that the Company prepare and file a registration statement on Form S-3 covering the resale of their shares, so long as the aggregate price to the public, net of any underwriters’ discounts and commissions, is less than $5,000,000. The Company is not obligated to effect more than two of these registration statements within any 12-month period.

The Investors’ Rights Agreement also provides for certain “piggyback” registration rights and that the Company will pay all expenses relating to any registrations effected pursuant to the Investors’ Rights Agreement, subject to specified exceptions.

The registration rights set forth in the Investors’ Rights Agreement terminate upon the earliest of: (i) the date that is three years after the completion of the IPO; (ii) immediately prior to the closing of certain liquidation events; and (iii) as to a given holder of registration rights, the date after the completion of the IPO when such holder of registration rights can sell all of such holder’s registrable securities during any ninety-day period pursuant to Rule 144 promulgated under the Securities Act.

The foregoing description of the Investors’ Rights Agreement is qualified in its entirety by reference to the full text thereof, a copy of which is attached (or incorporated by reference) as Exhibit 3 hereto

Lock-up

In connection with the IPO, Deerfield Private Design Fund III and Deerfield Partners entered into lock-up agreements with the underwriters in the IPO (the “IPO Lock-up Agreements”). Pursuant to the Lock-Up Agreements, each Fund agreed with such underwriters, subject to certain exceptions, not to dispose of or enter into hedging arrangements with respect to Common Stock or securities convertible into or exchangeable for shares of Common Stock during the period from the date of the Company’s IPO prospectus through the date that is 180 days after the date of such prospectus, except with the prior written consent of certain representatives of the underwriters. The IPO Lock-up Agreements also prohibit the Funds from exercising any registration rights during such 180-day period. The transfer restrictions contained in the IPO Lock-Up Agreements do not apply in respect of the transfer of shares acquired in the IPO. The representatives of the underwriters, in their sole discretion, may release shares of Common Stock and other securities subject to the IPO Lock-up Agreements in whole or in part at any time.

The foregoing description of the IPO Lock-up Agreements is qualified in its entirety by reference to the full text thereof, the form of which is attached (or incorporated by reference) as Exhibit 4 hereto

Equity Awards

As an employee of Deerfield Management, all grants received by Andrew ElBardissi as a director of the Company are for the benefit of Deerfield Management. In this regard, on August 5, 2020, Mr. ElBardissi received stock options for the purchase of an aggregate of 12,454 shares of Common Stock and a restricted stock unit award in respect of 2,222 shares of Common Stock, each of which grants are held for the benefit and at the direction of Deerfield Management. The foregoing options vest over three years from August 5, 2020, with one-third vesting on the first anniversary of the vesting commencement date and the remainder vesting in 24 equal monthly installments, and the foregoing restricted stock unit award vests over three years from August 5, 2020, with one-third vesting on each of the first three anniversaries of the vesting commencement date, in each case, subject to Andrew ElBardissi’s continued service through each such vesting date. Due to the fact that such options and restricted stock units are not vested and will not vest within 60 days from the date of this Schedule 13D, the shares of Common Stock underlying such awards are not included in the number of shares of Common Stock beneficially owned by Deerfield Management.

* Filed herewith.

SIGNATURE

After reasonable inquiry and to the best of their knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct.

Dated: August 20, 2020

CUSIP No. 005111109

Schedule A

General Partner of Deerfield Mgmt, L.P.

The general partner of Deerfield Mgmt is J.E. Flynn Capital, LLC. The address of the principal business and/or principal office of Deerfield Mgmt and J.E. Flynn Capital, LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Partners, L.P.

The general partner of Deerfield Partners is Deerfield Mgmt. The address of the principal business and/or principal office of Deerfield Mgmt and Deerfield Partners is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Mgmt III, L.P.

The general partner of Deerfield Mgmt III is J.E. Flynn Capital III, LLC. The address of the principal business and/or principal office of Deerfield Mgmt III and J.E. Flynn Capital III, LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Private Design Fund III, L.P.

The general partner of Deerfield Private Design Fund III is Deerfield Mgmt III. The address of the principal business and/or principal office of Deerfield Mgmt III and Deerfield Private Design Fund III is 780 Third Avenue, 37^th Floor, New York, New York 10017.

General Partner of Deerfield Management Company, L.P.

The general partner of Deerfield Management is Flynn Management LLC. The address of the principal business and/or principal office of Deerfield Management and Flynn Management LLC is 780 Third Avenue, 37^th Floor, New York, New York 10017.

CUSIP No. 005111109

Exhibit Index

Exhibit

* Filed herewith.