SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

Avalon Ventures VIII LP

(Last)

(First)

(Middle)

1134 KLINE STREET

(Street)

LA JOLLA

92037

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
Otonomy, Inc. [ OTIC ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
08/18/2014

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	08/18/2014		C		740,057	A	⁽²⁾	748,589	D⁽¹⁾
Common Stock	08/18/2014		C		660,580	A	⁽³⁾	1,409,169	D⁽¹⁾
Common Stock	08/18/2014		X		91,011	A	$8.79	1,500,180	D⁽¹⁾⁽⁷⁾
Common Stock	08/18/2014		S		50,001	D	$16	1,450,179	D⁽¹⁾⁽⁷⁾
Common Stock	08/18/2014		C		705,598	A	⁽³⁾	705,598	I	See footnote⁽⁴⁾
Common Stock	08/18/2014		P		109,375	A	$16	814,973	I	See footnotes⁽⁴⁾⁽⁸⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Series A Preferred Stock	⁽²⁾	08/18/2014		C			337,432	⁽²⁾	⁽²⁾	Common Stock	740,057	$0.00	0	D⁽¹⁾
Series B Preferred Stock	⁽³⁾	08/18/2014		C			175,889	⁽³⁾	⁽³⁾	Common Stock	175,889	$0.00	0	D⁽¹⁾
Series C Preferred Stock	⁽³⁾	08/18/2014		C			484,691	⁽³⁾	⁽³⁾	Common Stock	484,691	$0.00	0	D⁽¹⁾
Series C Preferred Stock	⁽³⁾	08/18/2014		C			568,828	⁽³⁾	⁽³⁾	Common Stock	568,828	$0.00	0	I	See footnote⁽⁴⁾
Series D Preferred Stock	⁽³⁾	08/18/2014		C			136,770	⁽³⁾	⁽³⁾	Common Stock	136,770	$0.00	0	I	See footnote⁽⁴⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	11/04/2018	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	11/04/2018	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	12/08/2018	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	12/08/2018	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	01/14/2019	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	01/14/2019	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	04/13/2019	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	04/13/2019	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	07/01/2019	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	07/01/2019	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	10/08/2019	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	10/08/2019	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	12/15/2019	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	12/15/2019	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	01/22/2020	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	01/22/2020	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	04/01/2020	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	04/01/2020	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series A Preferred Stock Warrant (right to buy)	$31.092	08/18/2014		C			6,432⁽²⁾	⁽⁵⁾	05/28/2020	Series A Preferred Stock	6,432	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$14.1773	08/18/2014		C		14,106⁽²⁾		⁽⁵⁾	05/28/2020	Common Stock	14,106	$0.00	14,106	D⁽¹⁾
Series C Preferred Stock Warrant (right to buy)	$8.79	08/18/2014		C			91,011⁽⁶⁾	⁽⁵⁾	08/18/2014	Series C Preferred Stock⁽³⁾	91,011	$0.00	0	D⁽¹⁾
Common Stock Warrant (right to buy)	$8.79	08/18/2014		C		91,011⁽⁶⁾		⁽⁵⁾	08/18/2014	Common Stock	91,011	$0.00	91,011	D⁽¹⁾
Common Stock Warrant (right to buy)	$8.79	08/18/2014		X			91,011	⁽⁵⁾	08/18/2014	Common Stock	91,011	$0.00	0	D⁽¹⁾⁽⁷⁾

1. Name and Address of Reporting Person^*

Avalon Ventures VIII LP

(Last)

(First)

(Middle)

1134 KLINE STREET

(Street)

LA JOLLA

92037

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

1. Name and Address of Reporting Person^*

Avalon Ventures X, L.P.

(Last)

(First)

(Middle)

1134 KLINE STREET

(Street)

LA JOLLA

92037

(City)

(State)

(Zip)

Relationship of Reporting Person(s) to Issuer

Director	X	10% Owner
Officer (give title below)		Other (specify below)

Explanation of Responses:

1. Avalon Ventures VIII GP, LLC ("Avalon VIII GP"), the general partner of Avalon Ventures VIII, L.P. ("Avalon VIII LP"), has sole voting and dispositive power with respect to the securities held by Avalon VIII LP. Kevin Kinsella, Stephen Tomlin, Richard Levandov, Braden Bohrmann, Douglas Downs and Jay Lichter, one of our directors, are the managing directors of Avalon VIII GP. Such persons and entities disclaim beneficial ownership of the securities held by Avalon VIII LP except to the extenet of any pecuniary interest therein.

2. The Series A Convertible Preferred Stock automatically converted into Common Stock on a 2.193204365 to one basis immediately prior to the completion of the Issuer's initial public offering of common stock and had no expiration date.

3. Each of the Series B Convertible Preferred Stock, Series C Convertible Preferred Stock and Series D Convertible Preferred Stock automatically converted into Common Stock on a one to one basis immediately prior to the completion of the Issuer's initial public offering of common stock and had no expiration date.

4. The reported securities are held of record by Avalon Ventures X, L.P. ("Avalon X LP"). Avalon Ventures X GP, LLC ("Avalon X GP"), the general partner of Avalon X LP, has sole voting and dispositive power with respect to the securities held by Avalon X LP. Kevin Kinsella, Stephen Tomlin, Richard Levandov, Braden Bohrmann, Douglas Downs and Jay Lichter, one of our directors, are the managing directors of Avalon X GP. Such persons and entities disclaim beneficial ownership of the securities held by Avalon X LP except to the extenet of any pecuniary interest therein.

5. The warrants are immediately exercisable.

6. The Series C Preferred Stock Warrants automatically converted into Common Stock Warrants on a one to one basis immediately prior to the completion of the Issuer's initial public offering of common stock.

7. Avalon VIII LP exercised the warrants to purchase 91,011 shares of Issuer Common Stock for $8.79 per share immediately prior to the completion of the Issuer's initial public offering of common stock. Avalon VIII LP paid the exercise price on a cashless basis, resulting in Issuer's withholding of 50,001 of the warrant shares to pay the exercise price and issuing to Avalon VIII LP the remaining 41,010 shares. The shares issued pursuant to such exercise remain subject to a 180-day lock-up restriction.

8. Avalon X LP purchased 109,375 shares of Issuer Common Stock in the Issuer's initial public offering.

Remarks:

	/s/ Douglas Downs, a managing member of Avalon Ventures VIII GP, LLC, the General Partner of Avalon Ventures VIII, L.P.	08/18/2014
	/s/ Douglas Downs, a managing member of Avalon Ventures X GP, LLC, the General Partner of Avalon Ventures X, L.P.	08/18/2014
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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