BOSTON and SYDNEY — 20 September 2019 AEST — 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, announces, in accordance with ASX Listing Rule 3.16.4, that it has entered into a revised employment agreement with the Company’s current Chief Executive Officer, Mr. Scott Schorer.

Mr. Schorer has been CEO of the Company since March 2016 and has overseen the Company’s successful preparation for the clinical development of EndoBarrier. GI Dynamics is pleased to have Mr. Schorer continue in the role as the Company initiates clinical trials in both the United States and India and applies for CE Mark designation in the European Union.

The key material terms of the revised employment agreement are set out in the schedule to this announcement.

The options referred to in the schedule have been issued to Mr. Schorer as part of the revised employment agreement and an Appendix 3B in respect of this issue of options accompanies this announcement.

The performance stock unit referred to in the schedule as forming part of Mr. Schorer’s remuneration package have not yet been issued. A separate announcement will be made in the event they are issued.

Additionally, the Company advises that it has made available an updated corporate presentation on its website, which it may use from time to time in presentations to investors and other interested parties.


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


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.

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.





Scott Schorer – Key terms of employment

Commencement Date: 20 September 2019 AEST

Effective Date: 16 September 2019 EST

Term: Mr. Schorer’s employment will continue until terminated by either party in accordance with the terms of the agreement.

Notice Period: Mr. Schorer’s is an at-will employee. Mr. Schorer or the Company may terminate his employment at any time, with or without cause or good reason, and with or without advance notice.

Fixed Compensation: Annual base salary of four hundred fifty thousand dollars (US$450,000)

Other Incentives:

  • Bonus: annual incentive bonus of up to 50% of his annual salary
  • Shares: subject to the approval of the board of directors of the Company, Mr. Schorer will receive:
  • stock options to purchase up to 1,169,545 shares of the Company’s common stock with the following material terms (Options) (such Options have been issued, as further detailed in the attached Appendix 3B);
  • Exercise price: US$1.12
  • Term: 10 years
  • Vesting: The Options will vest over a four (4) year period, with one quarter (1/4) of the shares subject to the Options vesting on the one (1) year anniversary of the date of grant, and the remaining shares vesting on a quarterly basis over the following three (3) years of continuous service, provided that the CEO is providing services to the Company as an employee or consultant on such vesting dates (no vesting will occur following the termination of employment or consulting services)
  • a performance stock unit (PSU) equal to 1,106,058 shares of the Company’s common stock. The PSU will provide for the issuance of:
  • 250,000 of the shares subject to the PSU upon completion of enrollment in Stage 1 of the STEP-1 Clinical Trial in the U.S.;
  • 428,029 of the shares subject to the PSU upon receipt of approval from the U.S. Food and Drug Administration (FDA) to continue enrollment in the STEP-1 Clinical Trial after a successful Stage 1 safety review with the FDA; and
  • 428,029 of the shares subject to the PSU upon attainment of US$5,000,000 in cumulative amounts received from any of the following sources: (1) revenue measured in accordance with generally accepted accounting principles in the U.S., (2) distributions to the Company from a joint venture to be formed with Apollo Sugar and/or (3) transfer fee income from a joint venture to be formed with Apollo Sugar.

Termination rights: In the event that Mr. Schorer’s employment with the Company is terminated by the Company without Cause, as defined in the agreement, or by Mr. Schorer, for Good Reason, as defined in the agreement, subject to his execution of a release of claims agreement acceptable to the Company, and subject to any restrictions contained in the ASX Listing Rules or other applicable laws, he will be entitled to continuation of salary for up to 12 months, and payment of health insurance premiums necessary to continue health insurance coverage under COBRA for up to 12 months. In addition, Mr. Schorer may also be entitled to a pro-rata portion of the performance bonus then in effect.