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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 3, 1999
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CardioDynamics International Corporation
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(Exact name of registrant as specified in its charter)
California 0-11868 95-3533362
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number.)
6175 Nancy Ridge Drive, Suite 300, San Diego, California 92121
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 535-0202
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n/a
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On December 3, 1999, CardioDynamics International Corporation, manufacturer of
BioZ(R) noninvasive digital cardiac output monitoring systems, completed a $3.3
million private placement of common stock to institutional investors, providing
the Company with capital to fund research and development of an Internet-based
medical product family and continue its domestic and international sales
expansion. A six percent placement agent fee was paid to ING Baring LLC related
to the transaction.
Participants of the private placement include Veritas Societe Generale, the
Company's second largest institutional shareholder, and three additional
European institutional investors. The investors purchased the unregistered
common stock with a four-month holding restriction at $2.50 per share which
represented a 9% discount to the 30-day average closing bid price on December 3,
1999.
Note: Except for the historical and factual information contained herein, this
filing contains forward-looking statements, the accuracy of which are
necessarily subject to uncertainties and risks, which include sole dependence on
the BioZ product line, a lack of general acceptance within the medical community
of TEB-based monitors, competition from Baxter Healthcare Corp. (manufacturer of
the Swan-Ganz(TM) device), further capital requirements, and various
uncertainties characteristic of companies just emerging from the development
stage; as well as other risks detailed in the Company's filings with the SEC,
including its 1998 Form 10-KSB. The Company does not undertake to update the
disclosures contained in this filing.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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99.1 Form of Common Stock Subscription Agreement dated December 3, 1999
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CardioDynamics
International Corporation
By: /s/ Michael K. Perry
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Michael K. Perry
Chief Executive Officer
Date: December 15, 1999
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Exhibit 99.1
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 $2.50 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
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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, December 3, 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
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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:
(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
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(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
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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.
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.
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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
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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.
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.
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5. PRICE RESET
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a. On April 3, 2000, the Company shall determine the average closing
price for the shares of Common Stock of the Company for the 20 trading days
preceding April 3, 2000 (the "Average Closing Price"). If the Average Closing
Price is less than $2.50, 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 $2.00 and the Purchaser has
purchased 100,000 Shares for an Aggregate Purchase Price of $250,000, then the
Company shall issue to Purchaser an additional 25,000 Reset Shares calculated as
follows: $250,000 divided by $2.00 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
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a. On or before April 3, 2000, 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 December 3, 2001 or until all
the Shares and 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.
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 Shares and the Reset Shares.
7. MISCELLANEOUS
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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
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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
December ___, 1999.
_____________________________________
(Signature of Purchaser)
_____________________________________
_____________________________________
_____________________________________
_____________________________________
_____________________________________
(Name, Address and Tax I.D. Number)
Number of Shares Purchased: _________
Aggregate Purchase Price: $__________
The Company hereby accepts the foregoing subscription and has executed this
Agreement as of December 3, 1999.
CARDIODYNAMICS INTERNATIONAL
CORPORATION, a California corporation
By: _________________________________
Name:________________________________
Title:_______________________________
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