UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 98193 / August 22, 2023

ACCOUNTING AND AUDITING ENFORCEMENT

Release No. 4447 / August 22, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-21576

In the Matter of

RESHAPE LIFESCIENCES 

INC., 

Respondent.

ORDER INSTITUTING CEASE-ANDDESIST PROCEEDINGS PURSUANT TO 

SECTION 21C OF THE SECURITIES 

EXCHANGE ACT OF 1934, MAKING 

FINDINGS, AND IMPOSING A CEASEAND-DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate that ceaseand-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities 

Exchange Act of 1934 (“Exchange Act”), against ReShape Lifesciences Inc. (“ReShape” or 

“Respondent”).

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer 

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 

Commission, or to which the Commission is a party, and without admitting or denying the findings 

herein, except as to the Commission’s jurisdiction over it and the subject matter of these 

proceedings, which are admitted, Respondent consents to the entry of this Order Instituting Ceaseand-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making 

Findings, and Imposing a Cease-and-Desist Order (“Order”), as set forth below.
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III.

On the basis of this Order and Respondent’s Offer, the Commission finds1that: 

Summary

1. These proceedings arise out of the violation of Exchange Act Rule 12b-25, which 

requires that issuers of a security registered pursuant to Section 12 of the Exchange Act that fail to 

file timely a periodic report shall file a Form 12b-25 “Notification of Late Filing,” commonly 

known as “Form NT,” which contains, among other things, reasonable detail as to why the issuer’s 

periodic report could not be filed on time and an explanation of any anticipated, significant changes 

in the issuer’s results of operations.

2. In August 2022, ReShape violated Rule 12b-25 by filing a Form 12b-25 with the 

Commission in which ReShape failed to disclose why, in sufficient detail under the circumstances 

presented, its second-quarter fiscal year (“FY”) 2022 Form 10-Q could not be timely filed. 

ReShape’s Form 12b-25 also failed to acknowledge anticipated, significant changes in ReShape’s 

results of operations for the second-quarter of FY2022, compared with ReShape’s operating results 

in the second-quarter of FY2021, and to provide an explanation of the changes. Three days after 

filing its Form 12b-25, ReShape filed its second-quarter FY2022 Form 10-Q disclosing to investors 

and the market a revision of its financial statements for the Forms 10-K for FY2020 and FY2021, 

and Forms 10-Q for all quarters of 2021 and the first quarter of 2022. ReShape, however, had 

failed to include in its Form 12b-25 any disclosure that the discovery, and ongoing correction, of 

errors in its prior Forms 10-Q and 10-K were among the principal reasons that it was unable to file 

timely the subject Form 10-Q for the second quarter of FY2022. 

Respondent

3. ReShape, a Delaware corporation based in San Clemente, California, provides 

weight-loss solutions to treat obesity and metabolic disease. At all relevant times, ReShape

common stock has been registered under Section 12(b) of the Exchange Act and trades on the 

NASDAQ Capital Market under the symbol RSLS.

Legal Framework and Facts

4. Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder require 

issuers with a security registered pursuant to Section 12 of the Exchange Act to file with the 

Commission annual reports on Form 10-K and quarterly reports on Form 10-Q.

 

1 The findings herein are made pursuant to Respondent's Offer of Settlement and are not binding on any 

other person or entity in this or any other proceeding.
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5. Rule 12b-25 provides that if an issuer fails to file a Form 10-K or 10-Q within the 

time period prescribed for such report, the issuer, no later than one business day after the due date 

for such report, shall file a Form 12b-25 with the Commission, disclosing the issuer’s inability 

to file the report timely and the reasons therefore in reasonable detail.2 Form 12b-25 requires the 

issuer to affirm, among other things, that the subject periodic report will be filed within fifteen 

calendar days, for a Form 10-K, or within five calendar days, for a Form 10-Q, of the report’s 

prescribed due date. Form 12b-25 also requires the issuer to confirm whether or not it anticipates 

that any significant change in results of operations from the corresponding period for the prior 

fiscal year will be reflected by the earnings statements to be included in the subject periodic report. 

If such change is anticipated, the issuer must attach a narrative and quantitative explanation of the 

anticipated change and, if appropriate, state the reasons why a reasonable estimate of the results 

cannot be made. 

6. On August 16, 2022, ReShape filed with the Commission a Form 12b-25 disclosing 

that ReShape could not file timely its Form 10-Q for its second fiscal quarter, ended June 30, 2022, 

because management “is unable, without unreasonable effort or expense, to file its Form 10-Q for 

the quarter ended June 30, 2022 (the ‘Form 10-Q’) within the prescribed time period as it requires 

additional time to complete the compilation of information for its financial statements and related 

disclosures.”

7. Furthermore, in its Form 12b-25, ReShape affirmed that it did not anticipate that 

any significant change in results of operations from the corresponding period for the prior fiscal 

year would be reflected in the subject Form 10-Q. 

8. On August 19, 2022, ReShape filed with the Commission a Form 10-Q disclosing 

that “[t]he Company revised the statement of operations for the periods ended December 31, 2020, 

March 31, 2021, June 30, 2021, September 30, 2021, December 31, 2021, and March 31, 2022, to 

reflect the correction of an immaterial error in the computation of the weighted average shares used 

to compute basic and diluted net loss per share. This revision has no impact on the Company’s net 

loss or accumulated deficit.” 

9. Prior to August 16, 2022, ReShape understood that its inability to meet the filing 

deadline for its second-quarter FY2022 Form 10-Q was due, in large part, to the discovery, and 

ongoing correction, of errors in its computation of the weighted average shares in its FY2021 

Forms 10-Q and first-quarter 2022 Form 10-Q. Moreover, the company was aware that its secondquarter FY2022 financial results, when reported, would differ significantly from its second-quarter 

FY2021 financial results, including a 153% increase in quarterly operating loss versus secondquarter FY2021. In its Form 12b-25, however, ReShape failed to disclose any of this information, 

much less provide the detailed narratives and quantitative explanation specifically called for by the 

form. 

 

2 Form 12b-25 specifies a “narrative” disclosure in “reasonable detail why” Form 10-Q or 10-K “could not 

be filed within the prescribed time period.” (See Form 12b-25, Part III.)
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Violations

10. As a result of the conduct described above, ReShape violated Section 13(a) of the 

Exchange Act and Rule 12b-25 thereunder.

IV.

In view of the foregoing, the Commission deems it appropriate to impose the sanctions 

agreed to in Respondent ReShape’s Offer.

Accordingly, it is hereby ORDERED that:

A. Pursuant to Section 21C of the Exchange Act, Respondent ReShape cease and desist 

from committing or causing any violations and any future violations of Section 13(a) of the 

Exchange Act and Rule 12b-25 thereunder.

B. Respondent shall, within 14 days of the entry of this Order, pay a civil money 

penalty in the amount of $35,000 to the Securities and Exchange Commission for transfer to the 

general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely 

payment is not made, additional interest shall accrue pursuant to 31 U.S.C. §3717. 

Payment must be made in one of the following ways: 

(1) Respondent may transmit payment electronically to the Commission, which 

will provide detailed ACH transfer/Fedwire instructions upon request; 

(2) Respondent may make direct payment from a bank account via Pay.gov 

through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or 

(3) Respondent may pay by certified check, bank cashier’s check, or United 

States postal money order, made payable to the Securities and Exchange 

Commission and hand-delivered or mailed to: 

Enterprise Services Center

Accounts Receivable Branch

HQ Bldg., Room 181, AMZ-341

6500 South MacArthur Boulevard

Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying 

ReShape as a Respondent in these proceedings, and the file number of these proceedings; a copy of 

the cover letter and check or money order must be sent to D. Mark Cave, Associate Director, 

Division of Enforcement, Securities and Exchange Commission, 100 F St., NE, Washington, DC 

20549. 
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C. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be 

treated as penalties paid to the government for all purposes, including all tax purposes. To 

preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor 

Action, it shall not argue that it is entitled to, nor shall it benefit by, offset or reduction of any 

award of compensatory damages by the amount of any part of Respondent’s payment of a civil 

penalty in this action (“Penalty Offset”). If the court in any Related Investor Action grants such a 

Penalty Offset, Respondent agrees that it shall, within 30 days after entry of a final order granting 

the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the 

Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be deemed 

an additional civil penalty and shall not be deemed to change the amount of the civil penalty 

imposed in this proceeding. For purposes of this paragraph, a “Related Investor Action” means a 

private damages action brought against Respondent by or on behalf of one or more investors based 

on substantially the same facts as alleged in the Order instituted by the Commission in this 

proceeding.

By the Commission.

Vanessa A. Countryman

Secretary