CUSIP No. 141597 10 4 Page 1 of 9 Pages
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)
(Amendment No. )[FN]
CardioDynamics International Corporation
(Name of Issuer)
Common Stock, no par value
(Title of Class of Securities)
141597 10 4
(CUSIP Number)
Kathleen K. Schoemaker John C. MacMurray, Esq.
Domain Associates, L.L.C. Reboul, MacMurray, Hewitt,
One Palmer Square Maynard & Kristol
Princeton, New Jersey 08452 45 Rockefeller Plaza
Tel. (609) 683-5656 New York, New York 10111
Tel. (212) 841-5700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 7, 1999
(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 which 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
[ ].
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[FN]
(1) 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 or otherwise
subject to the liabilities of that section of the Act but shall be subject to
all other provisions of the Act.
[FN]
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CUSIP No. 141597 10 4 Page 2 of 9 Pages
1) Name of Reporting Person Domain Partners
I.R.S. Identification IV, L.P.
No. of Above Person
(If an Entity)
2) Check the Appropriate Box (a) [x]
if a Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds WC
5) Check if Disclosure of
Legal Proceedings is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
6) Citizenship or Place
of Organization Delaware
Number of 7) Sole Voting 4,394,690 shares of
Shares Beneficially Power Common Stock
Owned by Each
Reporting Person
With
8) Shared Voting
Power -0-
9) Sole Disposi- 4,394,690 shares of
tive Power Common Stock
10) Shared Dis-
positive Power -0-
11) Aggregate Amount Beneficially 4,394,690 shares of
Owned by Each Reporting Person Common Stock
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
13) Percent of Class
Represented by 11.5%
Amount in Row (11)
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 141597 10 4 Page 3 of 9 Pages
1) Name of Reporting Person DP IV Associates,
I.R.S. Identification L.P.
No. of Above Person
(If an Entity)
2) Check the Appropriate Box (a) [x]
if a Member of a Group (b) [ ]
3) SEC Use Only
4) Source of Funds WC
5) Check if Disclosure of
Legal Proceedings is Not Applicable
Required Pursuant to
Items 2(d) or 2(e)
6) Citizenship or Place
of Organization Delaware
Number of 7) Sole Voting 105,310 shares of
Shares Beneficially Power Common Stock
Owned by Each
Reporting Person
With
8) Shared Voting
Power -0-
9) Sole Disposi- 105,310 shares of
tive Power Common Stock
10) Shared Dis-
positive Power -0-
11) Aggregate Amount Beneficially 105,310 shares of
Owned by Each Reporting Person Common Stock
12) Check if the Aggregate
Amount in Row (11)
Excludes Certain Shares
13) Percent of Class
Represented by 0.3%
Amount in Row (11)
14) Type of Reporting
Person PN
<PAGE>
CUSIP No. 141597 10 4 Page 4 of 9 Pages
SCHEDULE 13D
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, no par value (the "Common
Stock"), of CardioDynamics International Corporation, a California corporation
("CDIC" or the "Issuer"). The principal executive offices of the Issuer are
located at 6175 Nancy Ridge Drive, Suite 300, San Diego, California 92121.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Pursuant to Rules 13d-1 k(1)-(2) of Regulation 13D-G of the
General Rules and Regulations under the Securities Act of 1934, as amended (the
"Act"), the undersigned hereby file this Schedule 13D on behalf of Domain
Partners IV, L.P., a Delaware limited partnership ("DP IV"), and DP IV
Associates, L.P., a Delaware limited partnership ("DP IV A"). DP IV and DP IV A
are sometimes hereinafter referred to as the "Reporting Persons". The Reporting
Persons are making this single joint filing because they may be deemed to
constitute a "group" within the meaning of Section 13(d)(3) of the Act. The
agreement between the Reporting Persons to file as a group (the "Group
Agreement") is attached hereto as Exhibit A.
(b)-(c) DP IV and DP IV A are Delaware limited partnerships, each of
whose principal business is that of a private investment partnership. The sole
general partner of DP IV and DP IV A is One Palmer Square Associates IV, L.L.C.,
a Delaware limited liability company ("OPSA IV"), whose principal business is
that of acting as the general partner of DP IV and DP IV A. The following
individuals, who are citizens of the United States, are the managing members of
OPSA IV:
(i) James C. Blair
(ii) Brian H. Dovey
(iii) Jesse I. Treu
(iv) Kathleen K. Schoemaker
(v) Arthur Klausner
The principal business and principal office address of each entity and
person named in this paragraph is One Palmer Square, Princeton, New Jersey
08542.
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
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CUSIP No. 141597 10 4 Page 5 of 9 Pages
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, 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.
This statement relates to the acquisition by the Reporting Persons of
an aggregate 4,500,000 shares of Common Stock on May 28, 1999 and June 7,1999.
The Reporting Persons purchased an aggregate 1,500,000 shares of Common Stock,
at a purchase price of $1.00 per share, in a private placement offering by the
Issuer (the "Private Placement"), pursuant to a Common Stock Subscription
Agreement dated as of May 28, 1999 by and among the Reporting Persons and the
Issuer (the "Subscription Agreement"). The Subscription Agreement is attached
hereto as Exhibit B, and any description thereof is qualified in its entirety by
reference thereto. On June 7, 1999 the Reporting Persons purchased an aggregate
3,000,000 shares of Common Stock, at a purchase price of $1.20 per share, from
another shareholder of the Issuer, pursuant to a letter agreement dated June 4,
1999 between the Reporting Persons' manager and Mr. Allen D. Paulson (the
"Letter Agreement"). The Letter Agreement is attached hereto as Exhibit C, and
any description thereof is qualified in its entirety by reference thereto. The
source of funds for the purchases described herein was the working capital, or
funds available for investment, of the Reporting Persons.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons have acquired securities of the Issuer for
investment purposes.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The following information is based on a total of 38,215,960 shares of
Common Stock outstanding as of June 7, 1999.
(a)
DP IV
DP IV owns 4,394,690 shares of Common Stock, or approximately 11.5% of
the Common Stock outstanding. OPSA IV, as the general partner of DP IV, may
be deemed to beneficially own the shares of Common Stock owned by DP IV.
<PAGE>
CUSIP No. 141597 10 4 Page 6 of 9 Pages
DP IV A
DP IV A owns 105,310 shares of Common Stock, or approximately 0.3% of
the Common Stock outstanding. OPSA IV, as the general partner of DP IV A,
may be deemed to beneficially own the shares of Common Stock owned by DP IV
A.
(b) The managing members of OPSA IV may be deemed to share the power
to vote or direct the voting of and to dispose or to direct the disposition of
the Common Stock owned by DP IV and DP IV A. Each of the managing members of
OPSA IV disclaims beneficial ownership of all shares of Common Stock other than
the shares of Common Stock he or she owns by virtue of his or her indirect pro
rata interest, as a managing member of OPSA IV, in the Common Stock owned by DP
IV and/or DP IV A.
(c) Not applicable.
(d) Except as described in this statement, no person has the power to
direct the receipt of dividends on, or the proceeds from sales of, the shares of
Common Stock owned by DP IV or DP IV A.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS
OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Pursuant to the Subscription Agreement, on November 30, 1999 the
Issuer shall determine the average closing price of the Common Stock for the
month of November 1999 (the "Average Closing Price"). If the Average Closing
Price is less than $1.00, the Issuer shall issue to the Reporting Persons
without the payment of additional consideration such number of additional shares
of Common Stock (the "Reset Shares") equal to the purchase price of the shares
purchased under the Subscription Agreement divided by the Average Closing Price
less the number of shares purchased under the Subscription Agreement.
Also pursuant to the Subscription Agreement, the Issuer has agreed to
file with the Securities and Exchange Commission on or before November 30, 1999
a Registration Statement on Form S-3 registering for resale the shares purchased
under the Subscription Agreement and the Reset Shares, if any.
<PAGE>
CUSIP No. 141597 10 4 Page 7 of 9 Pages
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Group Agreement (Appears at Page 9)
Exhibit B - Subscription Agreement
Exhibit C - Letter Agreement
<PAGE>
CUSIP No. 141597 10 4 Page 8 of 9 Pages
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.
Dated: June 14, 1999
DOMAIN PARTNERS IV, L.P.
By: One Palmer Square Associates
IV L.L.C., General Partner
By /s/ Kathleen K. Schoemaker
-------------------------------
Managing Member
DP IV ASSOCIATES, L.P.
By: One Palmer Square Associates
IV L.L.C., General Partner
By /s/ Kathleen K. Schoemaker
-------------------------------
Managing Member
<PAGE>
CUSIP No. 141597 10 4 Page 9 of 9 Pages
EXHIBIT A
AGREEMENT OF
DOMAIN PARTNERS IV, L.P.
AND
DP IV ASSOCIATES, L.P.
PURSUANT TO RULE 13d-1(k)
The undersigned hereby agree that the Statement on Schedule 13D to
which this Agreement is annexed as Exhibit A is filed on behalf of each of them
in accordance with the provisions of 13d-1(k) under the Securities Exchange Act
of 1934, as amended.
Dated: June 14,1999
DOMAIN PARTNERS IV, L.P.
By: One Palmer Square Associates
IV L.L.C., General Partner
By /s/ Kathleen K. Schoemaker
-------------------------------
Managing Member
DP IV ASSOCIATES, L.P.
By: One Palmer Square Associates
IV L.L.C., General Partner
By /s/ Kathleen K. Schoemaker
-------------------------------
Managing Member
<PAGE>
EXHIBIT B
COMMON STOCK SUBSCRIPTION AGREEMENT
THIS COMMON STOCK SUBSCRIPTION AGREEMENT (this "Agreement") is entered
into as of the date set forth on the last page of this Agreement (the "Signature
Page") by and between the purchaser identified on the Signature Page (the
"Purchaser") and CARDIODYNAMICS INTERNATIONAL CORPORATION, a California
corporation (the "Company"), with reference to the following facts:
A. The Purchaser has agreed to purchase at a price of $1.00 per share
the number of shares of Common Stock of the Company set forth on the Signature
Page (the "Shares") for an aggregate purchase price also set forth on the
Signature Page (the "Aggregate Purchase Price").
B. The parties are entering into this Agreement to reflect the terms
and conditions of the Purchaser's investment in the Company represented by the
Shares.
NOW, THEREFORE, in respect of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SUBSCRIPTION
a. The Purchaser hereby agrees to subscribe for and to purchase the
Shares (the "Subscription") in exchange for the Purchase Price (which shall be
paid in United States dollars) on or before Friday, May 28, 1999.
b. Upon the Company's acceptance of this Subscription in its sole
discretion and receipt of immediately available funds representing the Purchase
Price, the Company shall issue to the Purchaser an appropriate share certificate
representing the Shares.
2. REPRESENTATIONS AND WARRANTIES
The Purchaser hereby represents and warrants to the Company as
follows:
a. The Purchaser has full capacity, power and authority to execute and
deliver this Agreement.
b. Without limiting the terms of the investment representations set
forth below, the Purchaser represents that the Purchaser has:
<PAGE>
(i) had an opportunity to ask questions and receive answers from the
Company and its officers and directors regarding matters relevant
to the Company and an investment therein (e.g., as represented by
the Subscription); and
(ii) further, had the opportunity to obtain any and all publicly
available information which the Purchaser deems necessary to
evaluate the Company and the investment represented by the
Subscription as well as to verify the accuracy of information
otherwise provided to the Purchaser.
c. The Purchaser is experienced in making investments in unregistered
and restricted securities. The Purchaser has such knowledge and experience in
financial and business matters that the Purchaser is capable of evaluating the
merits and risks of the investment in the Company represented by the
Subscription and, by reason of the Purchaser's financial and business
experience, the Purchaser has the capacity to protect the Purchaser's interest
in connection with the Subscription.
d. The Purchaser has either (i) a preexisting personal or business
relationship with the Company or one or more of its officers, directors or
control persons or (ii) by reason of the Purchaser's business or financial
experience, the Purchaser is capable of evaluating the risks and merits of the
investment represented by the Subscription and of protecting the Purchaser's own
interests in connection with such investment.
e. The Purchaser is an "accredited investor" as that term is defined
in Rule 501 promulgated under the Securities Act of 1933, as amended (the
"Act").
f. The Shares are being acquired by the Purchaser (i) solely for
investment purposes, (ii) for the Purchaser's own account only and (iii) not for
sale, transfer or with a view to any distribution of all or any part of such
Shares. No other person will have any direct or indirect beneficial interest in
the Shares.
3. UNDERSTANDINGS AND ACKNOWLEDGEMENTS
a. The Purchaser acknowledges that the Shares have not been registered
under the Act or qualified under the California Corporate Securities Law of
1968, as amended, or any other applicable blue sky laws in reliance, in part, on
the representations and warranties herein.
<PAGE>
b. The Purchaser understands that (i) the Shares are restricted
securities under the federal securities laws (e.g., the Act) insofar as the
Shares will be acquired from the Company in a transaction not involving a public
offering, (ii) under such laws and applicable regulations, the Shares may be
resold without registration under the Act only in certain limited circumstances
and (iii) in the absence of registration under the Act, the Shares must be held
indefinitely. The Purchaser understands the resale limitations imposed by the
Act and is familiar with Rule 144 under the Act, as presently in effect, and the
conditions which must be met in order for Rule 144 to be available with respect
to the resale of restricted securities.
c. The Purchaser understands that any certificates evidencing the
Shares may bear one or all of the following legends:
(i) THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
(ii) Any legend required by applicable state securities laws.
4. COVENANTS
a. Without in any way limiting the representations set forth above,
the Purchaser further agrees not to make any disposition of all or any portion
of the Shares purchased hereunder unless and until:
(i) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made
in accordance with such registration statement and any applicable
requirements of state securities laws; or
(ii) The Purchaser shall have (1) notified the Company of the proposed
disposition, (2) furnished the Company with a detailed statement
of the circumstances surrounding the proposed disposition and (3)
furnished the Company with a written opinion of counsel,
reasonably satisfactory to the Company, that such disposition
will not require registration of any securities under the Act or
the consent of (or a permit from) any authority under any
applicable state securities laws.
<PAGE>
The Purchaser understands that the Company will not require opinions of counsel
for transactions made pursuant to Rule 144 under the Act provided that the
Company receives all certificates and other information it may reasonably
request to permit it to determine that the subject disposition is, in fact,
exempt from the registration requirements of the Act pursuant to Rule 144.
b. In the case of any disposition of any Shares pursuant to Rule 144
under the Act, then in addition to the matters set forth in paragraph 4(a)(ii)
above, the Purchaser shall promptly forward to the Company a copy of any Form
144 filed with the Securities and Exchange Commission (the "SEC") with respect
to such disposition and a letter from the executing broker satisfactory to the
Company evidencing compliance with Rule 144. If Rule 144 is amended or if the
SEC's interpretations thereof in effect at the time of any such disposition by
the Purchaser have changed from the SEC's present interpretations thereof, the
Purchaser shall provide the Company with such additional documents as the
Company may reasonably require.
5. PRICE RESET
a. On November 30, 1999, the Company shall determine the average
closing price for the shares of Common Stock of the Company for the month of
November 1999 (the "Average Closing Price"). If the Average Closing Price is
less than $1.00, the Company shall promptly issue to Purchaser hereunder without
payment of additional consideration therefor a number of additional shares of
Common Stock of the Company (the "Reset Shares") equal to the Aggregate Purchase
Price as shown on the Signature Page divided by the Average Closing Price less
the Shares Purchased as shown on the Signature Page. By way of example, if the
Average Closing Price is $0.80 and the Purchaser has purchased 100,000 Shares
for an Aggregate Purchase Price of $100,000, then the Company shall issue to
Purchaser an additional 25,000 Reset Shares calculated as follows: $100,000
divided by $0.80 equals 125,000 less 100,000 equals 25,000 Reset Share.
b. The additional shares of Common Stock of the Company, if any,
issued hereunder shall be subject to the restrictions, limitations and
conditions imposed upon the Shares issued upon the initial subscription under
this Agreement.
6. REGISTRATION RIGHTS
a. On or before November 30, 1999, the Company at its expense shall
file with the SEC a Registration Statement on Form S-3 (the "Registration
Statement") under the Act registering for resale by Purchaser, and all other
Purchasers under similar Agreements, the Shares and the Reset Shares, if any.
The Company shall use its reasonable best efforts to cause the Registration
Statement to be declared effective and to remain in effect until May 28, 2001 or
until all Reset Shares included within the Registration Statement have been sold
by the Purchaser and all other Purchasers under similar Agreements or may be
sold pursuant to Rule 144, whichever shall first occur.
<PAGE>
b. In connection with the filing of the Registration Statement, the
Company shall indemnify the Purchaser against any liability under the Act for
the information concerning the Company contained in the Registration Statement
or incorporated by reference therein and shall at its expense make available to
Purchaser such number of copies of the prospectus constituting a part of the
Registration Statement as is reasonably necessary to allow Purchaser to resell
the Reset Shares.
7. MISCELLANEOUS
a. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of California (without regard to the
conflicts of law principles thereof).
b. This Agreement embodies the entire understanding between the
parties and supersedes any prior understandings, agreements and arrangements
between the parties respecting the subject matter hereof. There are no
representations, warranties, agreements, arrangements or understandings, oral or
written, between the parties hereto relating to the subject matter of this
Agreement which are not fully expressed herein.
c. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. The execution and delivery of signatures for this Agreement may
occur via telecopy, and such telecopied Signature Pages shall have the force and
effect of original signature pages.
IN WITNESS WHEREOF, the Purchaser has executed this Agreement as of
May ___, 1999.
------------------------------------
(Signature of Purchaser)
------------------------------------
------------------------------------
------------------------------------
------------------------------------
------------------------------------
(Name, Address and Tax I.D. Number)
Number of Shares Purchased: _________
Aggregate Purchase Price: $__________
<PAGE>
The Company hereby accepts the foregoing subscription and has executed
this Agreement as of May ___, 1999.
CARDIODYNAMICS INTERNATIONAL
CORPORATION, a California corporation
By:__________________________________
Name:________________________________
Title:_______________________________
<PAGE>
EXHIBIT C
June 4, 1999
Via Fax - (619) 756-3194
Mr. Allen E. Paulson
Paulson Enterprises
6001 Clubhouse Drive
Rancho Santa Fe, CA
92067-9660
Dear Mr. Paulson:
This letter confirms the intent of accounts managed by Domain
Associates ("Domain") to purchase 3,000,000 shares of CardioDynamics, Inc. (the
"Company") common shares presently owned by Allen E. Paulson, Trustee for the
Allen E. Paulson Living Trust ("Paulson") at a price of $1.20 per share, for a
total consideration of $3,600,000.00. We understand that the shares being
purchased carry a legend which will restrict subsequent sale and redistribution
by our managed accounts.
Countersignature of this letter by you (or any other authorized
representative of Paulson) will confirm the intent of Paulson to effect the sale
of CardioDynamics shares as outlined above, and will further confirm that no
prior agreements exist which would preclude your ability to sell and transfer
these shares to the Domain accounts in an orderly fashion.
Upon receipt of such countersigned letter, Domain will arrange to wire
transfer the agreed upon sum of $3,600,000.00 to the following account:
<PAGE>
-2-
Mr. Allen E. Paulson
Paulson Enterprises
City National Bank
400 North Roxbury Drive
Beverly Hills, CA 90210
ABA No. 122016066
Credit:
Allen E. Paulson Enterprises
001-340212
Assuming that we receive a fax copy of this countersigned letter on
Friday, June 4, 1999, we would expect to effect the wire transfer on Monday,
June 7, 1999.
Paulson will use its best efforts to effect timely delivery of the
share certificates to the Company (or its transfer agent) so that new share
certificates may be reissued to the following Domain accounts:
ACCOUNT NAME NUMBER OF SHARES
Domain Partners IV, L.P. 2,929,793
DP IV Associates, L.P. 70,207
By copy of this letter, Domain and Paulson are notifying the Company
about this transaction. The Company has previously agreed to cooperate in the
expeditious transfer of shares as outlined above.
<PAGE>
-3-
Mr. Allen E. Paulson
Paulson Enterprises
For purposes of regulatory filings, this letter also confirms that
Paulson and Domain do not constitute a group, or voting block, and will act
independently of each other in the future in considering all Company issues.
Yours truly,
James C. Blair
Managing Member
- ------------------------------
Confirmed by Paulson Enterprises
Cc: Mike Perry, CEO CardioDynamics
