UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT
TO § 240.13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO
§ 240.13d-2(a)
(Amendment No. 3)
CNS RESPONSE, INC.
(Name of Issuer)
Common Stock, par value $.001 per
share
(Title of Class of
Securities)
12619C101
(CUSIP Number)
David B. Jones
c/o SAIL Venture Partners,
LP
600 Anton Blvd., Suite
1010
Costa Mesa, CA 92626
(714) 241-7500
(Name, Address and Telephone Number of
Person
Authorized to Receive Notices and
Communications)
October 1, 2010
(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.
o.
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.
(Page 1 of 8)
* 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).
PAGE 2 OF 8
PAGES
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NAMES OF REPORTING PERSONS: |
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SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON |
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SAIL VENTURE PARTNERS, LLC |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) o |
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(b) o |
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SEC USE ONLY |
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SOURCE OF FUNDS |
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OO
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CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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DELAWARE
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SOLE VOTING POWER |
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| NUMBER OF |
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10,058,554
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| SHARES |
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SHARED VOTING POWER |
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| OWNED BY |
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0
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| EACH |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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| PERSON |
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SHARED DISPOSITIVE POWER |
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11) |
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16.9%
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TYPE OF REPORTING PERSON |
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OO LIMITED
LIABILITY COMPANY |
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NAMES OF REPORTING PERSONS: |
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SS. OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON |
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SAIL VENTURE PARTNERS, LP |
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a) o |
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(b) o |
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SEC USE ONLY |
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SOURCE OF FUNDS |
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OO
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CHECK BOX OF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |
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CITIZENSHIP OR PLACE OF ORGANIZATION |
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DELAWARE
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SOLE VOTING POWER |
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| NUMBER OF |
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10,058,554
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| SHARES |
8 |
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SHARED VOTING POWER |
| BENEFICIALLY |
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| OWNED BY |
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0
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| EACH |
9 |
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SOLE DISPOSITIVE POWER |
| REPORTING |
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| PERSON |
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| WITH |
10 |
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SHARED DISPOSITIVE POWER |
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0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON |
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW
(11) EXCLUDES CERTAIN SHARES |
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o |
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW
(11) |
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16.9%
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TYPE OF REPORTING PERSON |
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PN |
PAGE 4 OF
8 PAGES
This
amendment to Schedule 13D (“Amendment No. 3”) amends and supplements the
Schedule 13D of SAIL Venture Partners, LP (“SAIL Venture Partners”) and SAIL
Venture Partners, LLC filed with the Securities and Exchange Commission on March
19, 2007 (the “Original Filing”), as amended and supplemented on July 7, 2009
(“Amendment No. 1”) and August 31, 2009 (“Amendment No. 2”).
Terms not defined herein shall have the
meaning ascribed to them in the Original Filing, as amended.
ITEM 1.
SECURITY AND ISSUER.
This Amendment No. 3 relates to the
common stock, par value $.001 per share (the “Common Stock”), of CNS Response,
Inc., a Delaware corporation (the “Company”), which has its principal executive
offices at 85 Enterprise, Suite 410, Aliso Viejo, CA 92656.
ITEM 2.
IDENTITY AND BACKGROUND.
This Amendment No. 3 is being filed
jointly by SAIL Venture Partners, LP, formerly known as Odyssey Venture Partners
II, LP, and SAIL Venture Partners, LLC. SAIL Venture Partners is a licensed
small business investment company, investing in early stage technology
companies, and the address of the principal office of SAIL Venture Partners is
600 Anton Blvd., Suite 1010, Costa Mesa, CA 92626. The principal business of
SAIL Venture Partners, LLC, is to act as general partner of SAIL Venture
Partners, and its address is the same as SAIL Venture Partners. SAIL Venture
Partners, LLC, as general partner of SAIL Venture Partners, may be deemed to
beneficially own the securities owned by SAIL Venture Partners insofar as it has
the power to direct the voting and disposition of such securities. The managing
members of SAIL Venture Partners, LLC, are David B. Jones, Walter Schindler,
Alan Sellers, Henry Habicht and Michael Hammons (the "Managing Members"). A
unanimous vote of the Managing Members is required to vote or dispose of the
Company's securities held by SAIL Venture Partners. Each of the Managing Members
is a venture capitalist. The principal business address of each of the Managing
Members is 600 Anton Blvd., Suite 1010, Costa Mesa, CA 92626.
During the last five years, none of the
Managing Members, nor SAIL Venture Partners, LLC, nor SAIL Venture Partners has
been convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or 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.
ITEM 3.
SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 3 of the Original Filing, as
supplemented and amended by Amendment No. 1 and Amendment No. 2, is supplemented
and amended by reference to the information below.
On October 1, 2010, SAIL Venture
Partners loaned the Issuer $250,000 in its own funds in exchange for secured
convertible promissory notes in the aggregate principal amount of $250,000
(“Notes”). SAIL Venture Partners also received warrants to purchase up to
416,666 shares of the Issuer’s common stock (the “Warrants”) in connection with
the loan.
The Notes and the Warrants were issued
pursuant to a Note and Warrant Purchase Agreement, dated October 1, 2010, among
the Issuer and two investors, including SAIL Venture Partners. The Purchase
Agreement also provides that the Issuer and the holders of the Notes will enter
into a registration rights agreement covering the registration of the resale of
the shares underlying the Notes and the Warrants.
The Notes mature on October 1, 2011
(subject to earlier conversion or prepayment), earn interest equal to 9% per
year with interest payable at maturity, and are convertible into shares of
Common Stock at a conversion price of $0.30. The conversion price is subject to
adjustment upon (1) the subdivision or combination of, or stock dividends paid
on, the Common Stock; (2) the issuance of cash dividends and distributions on
the Common Stock; (3) the distribution of other capital stock, indebtedness or
other non-cash assets; and (4) the completion of a financing at a price below
the conversion price then in effect. The Notes can be declared due and payable
upon an event of default, defined in the Notes to occur, among other things, if
the Issuer fails to pay principal and interest when due, in the case of
voluntary or involuntary bankruptcy or if the Issuer fails to perform any
covenant or agreement as required by the Note.
The obligations of the Issuer under the
terms of the Notes are secured by a security interest in the tangible and
intangible assets of the Issuer, pursuant to a Security Agreement, dated as of
October 1, 2010, by and between the Issuer and John Pappajohn, as administrative
agent for the holders of the Notes. The agreement and corresponding security
interest terminate if and when holders of a majority of the aggregate principal
amount of Notes issued have converted their Notes into shares of Common
Stock.
The Warrants expire on September 20,
2017 and are exercisable for shares of common stock of the Issuer at an exercise
price of $0.30. Exercise price and number of shares issuable upon exercise are
subject to adjustment (1) upon the subdivision or combination of, or stock
dividends paid on, the Common Stock; (2) in case of any reclassification,
capital reorganization or change in capital stock and (3) upon the completion of
a financing at a price below the exercise price then in
effect.
On July 5, 2010 and August 20, 2010, the
Issuer issued unsecured promissory notes (each, a "Deerwood Note") in the
aggregate principal amount of $500,000 to Deerwood Partners LLC and Deerwood
Holdings LLC, with each investor purchasing two notes in the aggregate principal
amount of $250,000. The Deerwood Notes mature on December 15, 2010. SAIL Venture
Partners issued unconditional guaranties to each of these investors,
guaranteeing the prompt and complete payment when due of all principal, interest
and other amounts under each Deerwood Note. On August 20, 2010, the Issuer
granted SAIL Venture Partners warrants to purchase up to an aggregate of 100,000
shares of common stock at an exercise price (subject to customary anti-dilution
adjustments) of $0.56 per share in connection with the guaranties. The Issuer
has agreed to indemnify SAIL Venture Partners and grant it a security interest
in the Issuer's assets in connection with the guaranties and to enter into a
registration rights agreement covering the registration of the shares issuable
upon exercise of the warrants.
The beneficial ownership of the Issuer’s
Common Stock reported in this Amendment No. 3 by SAIL Venture Partners is based
on SAIL Venture Partners, LP’s ownership of 6,471,067 shares of Common Stock of
the Issuer, 845,833 shares of Common Stock of the Issuer issuable upon the
conversion of convertible notes and 2,741,654 shares of Common Stock of the
Issuer issuable upon the exercise of vested and exercisable warrants, and
assumes a total of 56,023,921 shares of the Common Stock of the Issuer issued
and outstanding as of October 1, 2010. It does not include 62,512 shares of
Common Stock of the Issuer issuable upon the exercise of vested options that
have been granted to David Jones.
The beneficial ownership of the Issuer’s
Common Stock reported in this Amendment No. 3 by SAIL Venture Partners, LLC is
based on SAIL Venture Partners, LLC’s indirect ownership of 6,471,067 shares of
Common Stock of the Issuer, 845,833 shares of Common Stock of the Issuer
issuable upon the conversion of convertible notes and 2,741,654 shares of Common
Stock of the Issuer issuable upon the exercise of vested and exercisable
warrants, and assumes a total of 56,023,921 shares of the Common Stock of the
Issuer issued and outstanding as of October 1, 2010. It does not include 62,512
shares of Common Stock of the Issuer issuable upon the exercise of vested
options that have been granted to David Jones.
David Jones, who is a principal of SAIL
Venture Partners, LLC, which is the general partner of SAIL Venture Partners,
currently serves as a director of the Issuer.
ITEM 4. PURPOSE OF
TRANSACTION.
Item 4 of the Original Filing, as
supplemented and amended by Amendment No. 1 and Amendment No. 2, is supplemented
and amended by reference to the information below. Reference is made to the
disclosure set forth under Item 3 of this Schedule 13D, as amended, which
disclosure is incorporated herein by reference.
All of the 6,471,067 shares of Common
Stock, notes convertible into 845,833 shares of Common Stock and warrants to
purchase 2,741,654 shares of Common Stock of the Issuer held by SAIL Venture
Partners and to which this Amendment No. 3 relates, were acquired for and are
held by SAIL Venture Partners as an investment.
PAGE 6 OF 8 PAGES
ITEM 5. INTEREST IN SECURITIES OF THE
ISSUER.
Item 5 of the Original Filing, as
supplemented and amended by Amendment No. 1 and Amendment No. 2, is supplemented
and amended by reference to the information below. Reference is made to the
disclosure set forth under Items 3 and 4 of this Schedule 13D, as amended, which
disclosure is incorporated herein by reference.
As of the date of this filing, SAIL
Venture Partners owns 6,471,067 shares of Common Stock of the Issuer, 845,833
shares of Common Stock of the Issuer issuable upon the conversion of convertible
notes and 2,741,654 shares of Common Stock of the Issuer issuable upon the
exercise of vested and exercisable warrants (the “SAIL Venture Partners
Shares”). Assuming a total of 56,023,921 shares of the Issuer’s Common Stock
outstanding as of October 1, 2010, the SAIL Venture Partners Shares constitute
approximately 16.9% of the shares of the Issuer’s Common Stock issued and
outstanding. They do not include 62,512 shares of Common Stock of the Issuer
issuable upon the exercise of vested options that have been granted to David
Jones.
SAIL Venture Partners, LLC, as the
General Partner of SAIL Venture Partners, beneficially owns 6,471,067 shares of
Common Stock of the Issuer, 845,833 shares of Common Stock of the Issuer
issuable upon the conversion of convertible notes and 2,741,654 shares of Common
Stock of the Issuer issuable upon the exercise of vested and exercisable
warrants (the “SAIL Venture Partners LLC Shares”). Assuming a total of
56,023,921 shares of the Issuer’s Common Stock outstanding as of October 1,
2010, the SAIL Venture Partners LLC Shares constitute approximately 16.9% of the
shares of the Issuer’s Common Stock issued and outstanding. They do not include
62,512 shares of Common Stock of the Issuer issuable upon the exercise of vested
options that have been granted to David Jones.
Each of the Managing Members of SAIL
Venture Partners, LLC may be deemed to beneficially own the securities owned by
SAIL Venture Partners insofar as they have the power to direct the voting or
disposition of such securities. Neither the filing of this Amendment No. 2 nor
any of its contents shall be deemed to constitute an admission that any of the
Managing Members as an individual is, for any purpose, the beneficial owner of
any of the SAIL Venture Partner Shares, and each of the Managing Members
disclaims beneficial ownership as to the SAIL Venture Partner
Shares.
Transactions by the Reporting Persons in
the Issuer’s Common Stock effected in the past 60 days are described in Item 3
above.
ITEM 6. CONTRACTS, ARRANGEMENTS,
UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE
ISSUER.
Other than the arrangements discussed in
Item 3 of the Original Filing, as amended and supplemented by Amendment No. 1,
Amendment No. 2 and this Amendment No. 3, the discussion of which is
incorporated by reference herein, there are no other contracts, arrangements,
understandings or relationships between the Reporting Person and any other
person, with respect to the securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS
EXHIBITS.
Exhibit
No.
1* Joint Filing
Agreement.
* Filed as a like-numbered exhibit to
the reporting person’s Schedule 13D which was filed with the Securities and
Exchange Commission on March 19, 2007.
CUSIP NO. 12619C101
SIGNATURES
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: October 19,
2010
SAIL Venture Partners,
LP
a Delaware limited partnership
/s/ David B.
Jones
By: SAIL Venture Partners,
LLC
a Delaware limited liability
company
By: David Jones
Its: Manager
Dated: : October 19,
2010
SAIL Venture Partners,
LLC
a Delaware limited liability
company
/s/ David B.
Jones
By: David Jones
Its: Manager
EXHIBIT INDEX
Exhibit
No.
---------
1* Joint Filing
Agreement.
* Filed as a like-numbered exhibit to
the reporting person’s Schedule 13D which was filed with the Securities and
Exchange Commission on March 19, 2007.