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13D Filing: Muneer A Satter and Vital Therapies Inc (NASDAQ:VTL)

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
Muneer A. Satter 11,034,688 0 11,034,688 0 11,034,688 26.9%

Page 1 of 8 – SEC Filing

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO RULE 13d-2(a)

Under the Securities Exchange Act of 1934

Vital Therapies, Inc.

(Name of issuer)

 

 

Common Stock,
par value $0.0001

(Title of class of securities)

92847R104

(CUSIP number)

Muneer A. Satter

c/o Satter Management Co., L.P.

676 N. Michigan Avenue, Suite 4000, Chicago, IL 60611

(312) 448-5500

COPY
TO:

Robert M. Hayward, P.C.

Kirkland & Ellis LLP

300 N. LaSalle St.

Chicago, Illinois 60654

(312) 862-2000

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

March 27, 2017

(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 Rule 13d-1(e), 13d-1(f) or 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 Rule 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 persons 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).

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Page 2 of 8 – SEC Filing


SCHEDULE 13D

CUSIP No. 92847R104 Page
2
of 8

Explanatory Note: The Reporting Person has previously filed statements on
Schedule 13G with respect to his ownership of the Issuers common stock. As a result of the recent purchase of shares in the Issuers registered public offering described in this Schedule 13D, the Reporting Person acquired more than 2% of
the Issuers outstanding common stock during the past 12 months and, therefore, is no longer eligible to report his ownership of common stock on Schedule 13G on an annual basis.

  (1)

Names of
reporting persons

Muneer A. Satter

  (2)

Check the appropriate box if a member
of a group (see instructions)

(a)  ☐        (b)  ☐

  (3)

SEC use only

  (4)

Source of funds (see instructions)

PF; OO

  (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 of America

Number of

shares

beneficially

owned by

each

reporting

person

with:

  (7)

Sole voting power

11,034,688 shares (see Item 5(a))

  (8)

Shared voting power

0 shares

  (9)

Sole dispositive power

11,034,688 shares (see Item 5(a))

(10)

Shared dispositive power

0 shares

(11)

Aggregate amount beneficially owned by each reporting person

11,034,688 shares (see Item 5(a))

(12)

Check if the aggregate amount in Row
(11) excludes certain shares (see instructions)

(13)

Percent of class represented by amount
in Row (11)

26.9%

(14)

Type of reporting person (see
instructions)

IN

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Page 3 of 8 – SEC Filing


SCHEDULE 13D

CUSIP No. 92847R104 Page
3
of 8

Item 1. Security and Issuer.

The class of equity security to which Schedule 13D relates is the common stock, par value $0.0001 per share (the Common
Stock
), of Vital Therapies, Inc. (the Company). The principal executive offices of the Company are located at 15010 Avenue of Science, Suite 200, San Diego, CA 92128.

Item 2. Identity and Background.

(a) Muneer A. Satter (the Reporting Person).

(b) The address of the principal business office of the Reporting Person is c/o Satter Management Co., L.P., 676 N. Michigan Avenue, Suite
4000, Chicago IL, 60611.

(c) The Reporting Person is Founder and Managing Partner of Satter Medical Technology Partners, L.P.
(SMTP) or one of its affiliates, a private equity fund, and Chairman of Satter Investment Management LLC, a family office and private investment firm. The principal business of the Reporting Person is to make investments in both
private and public companies in the medical technology industry (broadly defined to include biotech, medical devices and healthcare services) on behalf of SMTP and various trusts and other entities affiliated with the Reporting Person.

(d)-(e) During the last five years, the Reporting Person (and any general partner or controlling member of the various trusts and other
entities affiliated with the Reporting Person) has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, the Reporting Person (and any general partner or controlling member of
the various trusts and other entities affiliated with the Reporting Person) has not been 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) The Reporting Person is a citizen of the United States of America.

Item 3. Source and Amount of Funds.

On March 27, 2017, the Company closed a registered public offering of 8,750,000 shares of Common Stock, at a purchase price of $4.00 per
share. The Reporting Person acquired beneficial ownership of 3,750,000 shares of Common Stock in the offering for an aggregate purchase price of $15.0 million. The source of funds for the acquisition of shares in the offering was capital committed
by the partners of SMTP.

The Reporting Person has previously filed statements on Schedule 13G with respect to his ownership of Common
Stock. As a result of the purchase of shares in the Companys registered public offering, the Reporting Person acquired more than 2% of the Companys outstanding Common Stock during the past 12 months and, therefore, is no longer eligible
to report his ownership of Common Stock on Schedule 13G on an annual basis.

Item 4. Purpose of the Transaction.

The Reporting Person has acquired beneficial ownership of the Common Stock for investment purposes, and such acquisition has been made in the
Reporting Persons ordinary course of business.

In pursuing such investment purposes, the Reporting Person may further purchase,
hold, vote, trade, dispose of or otherwise deal in the Common Stock at such times, and in such manner, as he deems advisable to benefit from changes in the market prices of such Common Stock, changes in the Companys operations, business
strategy or prospects, or from a sale or merger of the Company or otherwise. To evaluate such alternatives, the Reporting Person will routinely monitor the Companys operations, prospects, business development, management, competitive and
strategic matters, capital structure, and prevailing market conditions, as well as alternative investment opportunities, liquidity objectives and other investment considerations. Furthermore, in his capacity as a member of the Companys board
of directors and a significant shareholder, the Reporting Person will from time to time discuss various matters with management and other directors of the Company, other shareholders, industry analysts, existing or potential strategic partners or
competitors, investment and financing professionals, sources of credit and other investors.

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Page 4 of 8 – SEC Filing


SCHEDULE 13D

CUSIP No. 92847R104 Page
4
of 8

The Reporting Person has no current intention to propose changes in the Companys
operations, governance or capitalization, or to propose one or more of the other actions described in subsections (a) through (j) of Item 4 of Schedule 13D. However, the Reporting Person reserves the right to formulate other plans
and/or make other proposals, and take such actions with respect to his investment in the Company, including any or all of the actions set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D, or to acquire additional shares
of Common Stock or dispose of all the Common Stock beneficially owned by him, in the public market, in privately negotiated transactions (which may be with the Company or with third parties) or otherwise. The Reporting Person may at any time
reconsider and change his plans or proposals relating to the foregoing.

Item 5. Interest in Securities of the Issuer.

(a) Amount beneficially owned as of the date hereof:

The Reporting Person beneficially owns
an aggregate of 11,034,688 shares of Common Stock. The shares of Common Stock beneficially owned by the Reporting Person include (a) 4,202,930 shares of Common Stock that are held by Muneer A. Satter Revocable Trust for which the Reporting
Person serves as trustee and, in such capacity, has sole voting and dispositive power over all such shares; (b) 2,929,347 shares of Common Stock that are held by various other trusts and other entities for which the Reporting Person serves as
trustee, investment advisor or manager and, in such capacity, has sole voting and dispositive power over all such shares; (c) 3,750,000 shares that are held by Satter Medical Technology Partners, L.P. for which the Reporting Person has sole
voting and dispositive power over all such shares; (d) warrants to acquire 60,639 shares of Common Stock that are held by the Muneer A. Satter Revocable Trust for which the Reporting Person serves as trustee and, in such capacity, has the sole
power to exercise such warrants and sole voting and dispositive power over all shares underlying such warrants; (e) warrants to acquire 61,533 shares of Common Stock that are held by various trusts and other entities for which the Reporting
Person serves as trustee, investment advisor or manager, and in such capacity, has the sole power to exercise such warrants and sole voting and dispositive power over all shares underlying such warrants; and (f) stock options to purchase 30,239
shares of Common Stock, which vest on the earlier of May 24, 2017 and the date immediately prior to the Issuers 2017 annual meeting of stockholders.

Percent of class:

In the aggregate, the Reporting Persons beneficially own 11,034,688 shares of
Common Stock, or 26.9% of the total number of shares of Common Stock outstanding.

All percentages calculated in this Schedule 13D are
based upon 40,893,475 shares outstanding (which assumes no exercise of the underwriters option to purchase additional shares) as of March 22, 2017, as disclosed in the Companys Prospectus Supplement filed with the Securities and
Exchange Commission (SEC) on March 23, 2017.

(b) Number of shares as to which such person has:
(i) sole power to vote or to direct the vote: See Item 7 on the cover pages hereto.
(ii) shared power to vote or to direct the vote: See Item 8 on the cover pages hereto.
(iii) sole power to dispose or to direct the disposition of: See Item 9 on the cover pages hereto.
(iv) shared power to dispose or to direct the disposition of: See Item 10 on the cover pages hereto.
(c) The information set forth in Item 3 of this Schedule 13D is hereby incorporated by reference into this Item 5(c), as applicable.
(d) Not applicable
(e) Not applicable

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Page 5 of 8 – SEC Filing


SCHEDULE 13D

CUSIP No. 92847R104 Page
5
of 8

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer.

The information set forth in Items 3 and 4 of this Schedule 13D is hereby incorporated by reference into this Item 6, as
applicable.

Senior Preferred Investors Rights Agreement

Pursuant to the Companys Fourth Amended and Restated Investors Rights Agreement, dated August 28, 2013, as amended (the
Senior Preferred IRA), certain holders of Common Stock, including the Reporting Person and various trusts and other entities affiliated with the Reporting Person, are entitled to certain rights with respect to the registration of
shares of Common Stock under the Securities Act. Subject to company-imposed lock-ups and certain limitations in the Senior Preferred IRA, including its ability to delay registration in certain circumstances, the holders of at least 25% of these
securities then outstanding may demand on three occasions, that the Company use its reasonable best efforts to register these securities using a long form registration statement for public resale if the anticipated aggregate offering price, net of
underwriting discounts and commissions, would exceed $15 million. If the Company registers any of its common stock either for its own account or for the account of other security holders, the holders of these securities are entitled to include
their shares of common stock in that registration, subject to the ability of the underwriters to limit the number of shares included in the offering. The Company is obligated to use its reasonable best efforts to make short form registration
statements available, and the holders of at least 25% of these securities then outstanding may also demand, but not more than two times in any 12-month period, that the Company registers all or a portion of these securities using a short form
registration statement, provided, among other limitations, that the proposed aggregate selling price is at least $15 million. The Company will be responsible for paying all registration expenses, including the reasonable fees of legal counsel
for the selling holders, and the holders selling their shares will be responsible for paying all selling expenses.

Registration rights
under the Senior Preferred IRA terminate, as to a given holder of registration rights, when such holder and such holders affiliates can sell all of their registrable securities in a three-month period pursuant to Rule 144. Accordingly,
only those of its directors, executive officers and their affiliates who were parties to the Senior Preferred IRA have existing registration rights.

The Senior Preferred IRA also provides that, for so long as the Reporting Person and various trusts and other entities affiliated with the
Reporting Person holds at least 30% of the outstanding Common Stock, the Reporting Person and various trusts and other entities affiliated with the Reporting Person have the right to nominate 40% of the Companys directors (rounded up to the
nearest whole number). If the Reporting Person and various trusts and other entities affiliated with the Reporting Person hold less than 30% (but at least 20%) of the outstanding Common Stock, they have the right to nominate 30% of the
Companys directors (rounded up to the nearest whole number). If the Reporting Person and various trusts and other entities affiliated with the Reporting Person hold less than 20% (but at least 10%) of the outstanding Common Stock, they have
the right to nominate 20% of the Companys directors (rounded up to the nearest whole number). If the Reporting Person and various trusts and other entities affiliated with the Reporting Person hold less than 10% (but at least 2%) of the
outstanding Common Stock, they have the right to nominate 10% of the Companys directors (rounded up to the nearest whole number). For so long as the Reporting Person and various trusts and other entities affiliated with the Reporting Person
hold less than 2% of the outstanding Common Stock, they do not have the contractual right to nominate any representatives to the Companys board of directors. To date the Reporting Person and various trusts and other entities affiliated with
the Reporting Person have not exercised their rights to nominate any directors, but they have reserved the right to do so in the future.

The Senior Preferred IRA provides that for so long as the Reporting Person and Terence E. Winters both serve as members of the Companys
board of directors, each shall serve as co-chairman of the Companys board of directors and the Reporting Person shall serve as the Companys Lead Director. In the event that the Reporting Person serves as a member of the Companys
board of directors at a time when Dr. Winters does not, the Reporting Person will serve as the Companys chairman of the board and Lead Director. Dr. Winters will serve as Co-Chairman only so long as he is both a director and the
Companys Chief Executive Officer.

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Page 6 of 8 – SEC Filing


SCHEDULE 13D

CUSIP No. 92847R104 Page
6
of 8

Series D Investors Rights Agreement

Pursuant to the Companys investors rights agreement, dated June 7, 2011 (the Series D IRA), certain holders
of Common Stock, including the Reporting Person and various trusts and other entities affiliated with the Reporting Person, are entitled to certain rights with respect to the registration of such shares under the Securities Act. Subject to
company-imposed lock-ups and limitations in the Series D IRA, including the Companys ability to delay registration in certain circumstances, the holders of at least 25% of these securities then outstanding may require, on two occasions,
that the Company use its best efforts to register these securities using a long-form registration statement for public resale if the anticipated aggregate offering price, net of underwriting discounts and commissions, would exceed $7 million.
If the Company registers any of its common stock either for its own account or for the account of other security holders, the holders of these securities are entitled to include their shares of common stock in that registration, subject to the
ability of the underwriters to limit the number of shares included in the offering to as few as 45% of the offering. The holders of these securities then outstanding may also require us, but not more than one time in any 12-month period, to register
all or a portion of these securities using a short form registration statement, provided, among other limitations, that the proposed aggregate selling price is at least $1 million. The Company will be responsible for paying all registration
expenses, including the reasonable fees of legal counsel for the selling holders, and the holders selling their shares will be responsible for paying all selling expenses.

Registration rights under the Series D IRA terminate upon the earliest of (i) the five-year anniversary of the effective date of the
Companys initial public offering, or (ii) as to a given holder of registration rights, when such holder and such holders affiliates can sell all of such holders registrable securities in a three month-period pursuant to Rule
144. Accordingly, only those of directors, executive officers and their affiliates who were parties to the Series D IRA (and whose registration rights under the Series D IRA were not superseded by the Senior Preferred IRA) have existing registration
rights.

The description of the above agreements do not purport to be complete descriptions and are qualified in their entirety by
reference to the full text of such agreements, which are filed as part of this Schedule 13D and incorporated by reference herein.

Item 7.
Material to be Filed as Exhibits.

Exhibit A: Fourth Amended and Restated Investors Rights Agreement, dated August 28, 2013 (incorporated by reference to Exhibit 4.2 to the Companys Registration Statement on Form S-1 filed on October 11,
2013)
Exhibit B: Amended and Restated Investors Rights Agreement dated June 7, 2011 (incorporated by reference to Exhibit 4.4 to the Companys Registration Statement on Form S-1 filed on October 11, 2013)

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Page 7 of 8 – SEC Filing


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: April 3, 2017
By: /s/ Muneer A. Satter_______________
Muneer A. Satter

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Page 8 of 8 – SEC Filing


EXHIBIT INDEX

Exhibit A: Fourth Amended and Restated Investors Rights Agreement, dated August 28, 2013 (incorporated by reference to Exhibit 4.2 to the Companys Registration Statement on Form S-1 filed on October 11,
2013)
Exhibit B: Amended and Restated Investors Rights Agreement dated June 7, 2011 (incorporated by reference to Exhibit 4.4 to the Companys Registration Statement on Form S-1 filed on October 11, 2013)
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