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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
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Date of Report (Date of earliest event reported):
March 10, 2000
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OPTICAL SENSORS INCORPORATED
(Exact name of registrant as specified in its charter)
Delaware 0-27600 41-164359
(State or Other of (Commission File Number) (I.R.S. Employer
Incorporation) Identification Number)
7615 Golden Triangle Drive, Suite A,
Minneapolis, Minnesota 55344-3733
(Address of principal executive offices) (Zip Code)
(952) 944-5857
(Company's telephone number, including area code)
Not applicable.
(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On March 10, 2000, Optical Sensors Incorporated, a Delaware corporation
(the "Company"), entered into an Investment Agreement with Circle F Ventures,
LLC, a Georgia limited liability company, and Special Situations Fund III, L.P.,
a Delaware limited partnership (collectively, the "Investors"), pursuant to
which the Company agreed to issue convertible promissory notes in the aggregate
principal amount of up to $3,000,000 (the "Notes"). A copy of the press release
announcing the Investment Agreement dated March 10, 2000 is attached as an
exhibit to this Report and is incorporated herein by reference. The Notes are
convertible into units ("Units"), each Unit consisting of 50,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), and a
five-year warrant to purchase 12,500 shares of Common Stock at an exercise price
of $1.00 per share (the "Warrants"), at a conversion price equal to $50,000 per
Unit, in accordance with the Investment Agreement.
The Company received advances under the Notes in the aggregate amount of
$1,400,000 on March 10, 2000. The Company has the right to request additional
advances up to the aggregate principal amount of $1,600,000 at any time during
the 60 day period beginning on the first day after both of the following have
occurred: (1) the Company executes a definitive distribution agreement for the
Company's CapnoProbe product with a major medical company, and (2) the
stockholders of the Company have approved the conversion of any additional
advances to be made under the Notes into Units at the Company's 2000 Annual
Meeting of Stockholders. The Company's right to request additional advances
will expire on June 15, 2000.
The Company has agreed to file a registration statement with the Securities
and Exchange Commission by April 9, 2000 covering the resale of the shares of
Common Stock issuable upon conversion of the Notes and the shares of Common
Stock issuable upon exercise of the Warrants. In addition, the Company has
agreed to use its best efforts to meet any requirements or take any action
necessary to maintain listing of the Company's Common Stock on the Nasdaq
National Market, including seeking stockholder approval at the Company's 2000
Annual Meeting of Stockholders for the conversion of the Notes into Units. Each
Investor has agreed to vote all shares of Common Stock of the Company
beneficially owned by such Investor for the conversion of the Notes into Units
at the Company's 2000 Annual Meeting of Shareholders.
As a result of the issuance of shares of Common Stock to the Investors upon
conversion of the Notes and exercise of the Warrants under the Investment
Agreement, each Investor may acquire shares of Common Stock likely to cause such
Investor's beneficial ownership to exceed 15% of the issued and outstanding
shares of the Company's Common Stock. Pursuant to Section 1(a) of the Company's
Rights Agreement with Norwest Bank Minnesota N.A. dated as of December 3, 1996
("Rights Agreement"), a person who becomes the beneficial owner of 15% or more
of the issued and outstanding Common Shares (as defined in the Rights Agreement)
is an "Acquiring Person" for purposes of the Rights Agreement. The Company has
amended the Rights Agreement to provide that the threshold for determining
whether a person is an "Acquiring Person" for purposes of the Rights Agreement
will, with respect to each of the Investors and their affiliates, be 24% or more
of the Common Shares then outstanding. A copy of the Amendment No. 1 to Rights
Agreement is attached as an exhibit to this Report and is incorporated herein by
reference.
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Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Businesses Acquired.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
Exhibit Description Method of Filing
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10.1 Amendment No. 1 to Rights Agreement
dated as of March 10, 2000 between
Optical Sensors Incorporated and
Norwest Bank Minnesota, N.A......... Filed herewith.
99.1. Press Release dated March 10, 2000.. Filed herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
OPTICAL SENSORS INCORPORATED
By: /s/ Paulita M. LaPlante
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Paulita M. LaPlante
President and Chief Executive Officer
Dated: March 13, 2000
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INDEX TO EXHIBITS
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Exhibit Description Method of Filing
- --------- ----------- ----------------
10.1 Amendment No. 1 to Rights Agreement dated as
of March 10, 2000 between Optical Sensors
Incorporated and Norwest Bank Minnesota, N.A....... Filed herewith.
99.1. Press Release dated March 10, 2000................. Filed herewith.
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AMENDMENT NO.1 TO RIGHTS AGREEMENT
This Amendment No. 1 to Rights Agreement (this "Amendment") is between
Optical Sensors Incorporated, a Delaware corporation (the "Company"), and
Norwest Bank Minnesota, N.A., a national banking association (the "Rights
Agent"), effective as of March 9, 2000.
A. The Company and the Rights Agent have entered into a Rights Agreement,
dated as of December 3, 1996 (the Rights Agreement"). Capitalized terms used and
not otherwise defined herein will have the meaning given in the Rights
Agreement.
B. Section 27 of the Rights Agreement provides that, prior to the
Distribution Date, the Company may amend the Rights Agreement, including the
definition of an Acquiring Person as set forth in Section 1(a) thereof, upon the
approval of at least a majority of the Continuing Directors, and that, upon any
such amendment, the Rights Agent shall amend the Rights Agreement as the Company
directs.
C. The Company desires, and hereby directs the Rights Agent, to amend the
definition of an Acquiring Person, and the Rights Agent agrees to such
amendment, on the terms and conditions hereof.
Accordingly, the Company and the Rights Agent agree as follows:
1. Representations and Warranties. The Company represents and warrants to the
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Rights Agent that:
(a) to the best knowledge of the Company, the Distribution Date has not
occurred prior to the effective date hereof; and
(b) this Amendment is authorized pursuant to the requirements of Section 27
of the Rights Agreement, having been approved by a majority of the
Company's Continuing Directors.
2. Amendment of Section 1(a). Section 1(a) of the Rights Agreement is hereby
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amended by deleting Section 1(a) in its entirety and substituting the
following therefor:
(a) Acquiring Person, shall mean any Person who or which, alone or together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the Common Shares then outstanding (the "Acquiring
Person Trigger Amount") (other than as a result of a Permitted Offer (as
hereinafter defined)), but shall not include the Company, any Subsidiary of
the Company, or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person organized, appointed or established
by the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person": (i) as the result of an acquisition of Common Shares by the
Company which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares beneficially owned by
such Person to the Acquiring Person Trigger Amount; provided,
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however, that if a Person shall become the Beneficial Owner of the Acquiring
Person Trigger Amount by reason of Common Share purchases by the Company and
shall thereafter become the Beneficial Owner of any additional Common Shares,
other than pursuant to the receipt of stock dividends or stock splits on a pro
rata basis on Common Shares already beneficially owned by such Person, then such
Person shall be deemed to be an "Acquiring Person" or (ii) who is a Person who
is the Beneficial Owner of the Acquiring Person Trigger Amount but who acquired
Beneficial Ownership of Common Shares without any plan or intention to seek or
affect control of the Company, if such Person promptly enters into an
irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting, with respect to
such shares), sufficient shares of Common Shares (or securities convertible
into, exchangeable into or exercisable for Common Shares) so that such Person
ceases to be the Beneficial Owner of the Acquiring Person Trigger Amount or
(iii) who beneficially owns Common Shares consisting solely of one or more (A)
Common Shares beneficially owned pursuant to the grant for exercise of an option
granted to such Person by the Company in connection with an agreement to merge
with, or acquire, the Company entered into prior to a Section 11(a)(ii) Trigger
Date, (B) Common Shares (or securities convertible into, exchangeable into or
exercisable for Common Shares), beneficially owned by such Person or its
Affiliates or Associates at the time of grant of such option or (C) Common
Shares (or securities convertible into, exchangeable into or exercisable for
Common Shares) acquired by Affiliates or Associates of such Person after the
time of such grant which, in the aggregate, amount to less than 1% of the
outstanding Common Shares. For purposes of the definition of "Acquiring Person",
the Acquiring Person Trigger Amount for Hayden R. Fleming ("Fleming") or Circle
F Ventures, LLC, a Georgia limited liability company ("Circle F") (Fleming and
Circle F are collectively referred to as the "Circle F Group"), shall be 24% or
more of the Common Shares then outstanding (the "Circle F Trigger Amount") which
shall be applicable if any member of the Circle F Group has, or, together with
any Affiliates and Associates of such member, shall be the Beneficial Owner of,
such Circle F Trigger Amount. For purposes of the definition of "Acquiring
Person", the Acquiring Person Trigger Amount for Special Situations Fund III,
L.P., a Delaware limited partnership ("SSF III"), MGP Advisers Limited
Partnership, a Delaware limited partnership ("MGP"), Special Situations Cayman
Fund, L.P., a Cayman Islands limited partnership (SS Cayman"), AWM Investment
Company, Inc., a Delaware corporation ("AWM"), Austin W. Marxe ("Marxe") or
David Greenhouse ("Greenhouse") (SSF III, MGP, SS Cayman, AWM, Marxe and
Greenhouse are collectively referred to as "Special Situations Group"), shall be
24% or more of the Common Shares then outstanding (the "Special Situations
Trigger Amount") which shall be applicable if any member of the Special
Situations Group has, or, together with any Affiliates and Associates of such
member, shall be the Beneficial Owner of, such Special Situations Trigger
Amount.
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3. Amendment of Section 3(a). Subpart (ii) of the first sentence of Section
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3(a) of the Rights Agreement is hereby amended by deleting such subpart in
its entirety and substituting the following therefor:
(ii) the close of business on the tenth Business Day (or such later date as
may be determined by the Board, acting by a majority of the Continuing
Directors, prior to such time as any Person has become an Acquiring Person)
after the date that a tender or exchange offer (other than a Permitted
Offer) by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of the Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act (or any comparable or
successor rule), if upon consummation thereof, such Person would be the
Beneficial Owner of the Acquiring Person Trigger Amount; provided, however,
if such an offer is made by (a) a member of the Circle F Group (a "Circle F
Offer"), which, upon consummation thereof, would result in a member of the
Circle F Group having or, together with any Affiliates and Associates of
such member, becoming the Beneficial Owner of, less than the Circle F
Trigger Amount, then such Circle F Offer shall not be considered to be a
Distribution Date, but if the consummation of such Circle Offer would
result in any member of the Circle F Group having, or, together with any
Affiliates and Associates of such member, becoming the Beneficial Owner of,
the Circle F Trigger Amount, then such Circle F Offer shall be considered a
Distribution Date; or (b) a member of the Special Situations Group (a
"Special Situations Offer"), which, upon consummation thereof, would result
in any member of the Special Situations Group having or, together with any
Affiliates and Associates of such member, becoming the Beneficial Owner of,
less than the Special Situations Trigger Amount, then such Special
Situations Offer shall not be considered to be a Distribution Date, but if
the consummation of such Special Situations Offer would result in any
member of the Special Situations Group having, or, together with any
Affiliates and Associates of such member, becoming the Beneficial Owner of,
the Special Situations Trigger Amount, then such Special Situations Offer
shall be considered a Distribution Date, or
4. No Other Changes. Except as specifically amended by this Amendment, all
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other provisions of the Rights Agreement shall remain in full force and
effect. This Amendment shall not constitute or operate as a waiver of, or
estoppel with respect to, any provisions of the Rights Agreement by any
party hereto.
5. Counterparts. This Amendment may be executed in one or more counterparts,
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each of which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
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The Company and the Rights Agent have caused this Amendment to be duly
executed on their behalf by their respective duly authorized representatives as
of the date first written above.
OPTICAL SENSORS INCORPORATED NORWEST BANK MINNESOTA, N.A.
By: /s/ Paulita M. LaPlante By: /s/ Susan J. Roeder
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Paulita M. LaPlante Susan J. Roeder
Its: President and Chief Executive Officer Its: Vice President
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FROM: FOR:
BlueFire Partners Optical Sensors Incorporated
150 South Fifth St., Suite 1300 7615 Golden Triangle Drive
Minneapolis, Minn. 55402 Minneapolis, Minn. 55344
Contact: Doug Ewing (612) 344-1036 Contact: Wes Peterson, CFO (612) 944-5857
OPTICAL SENSORS RECEIVES $3 MILLION FINANCING COMMITTMENT
MINNEAPOLIS, March 10, 2000 -- Optical Sensors Inc. (Nasdaq: OPSI) said
today that it has received a commitment for $3 million in new financing from a
group of private investors. The financing consists of promissory notes
convertible into an aggregate of 3,000,000 shares of Optical Sensors' common
stock and warrants to purchase an additional 750,000 shares of common stock at
an exercise price of $1.00 per share. The Company has agreed to register the
resale of the shares issuable upon conversion of the notes and the warrants.
Paulita LaPlante, president and chief executive officer, said, "We are
pleased to have arranged this financing, the timing of which will allow us to
continue to move forward with our ongoing strategic negotiations covering
Optical Sensors' CapnoProbe(TM) technology."
Optical Sensors announced in February that it had signed a non-binding
letter of intent with a major supplier of medical products and services to
negotiate a definitive agreement for the CapnoProbe product and technology. The
agreement includes a confidentiality understanding that precludes identifying
the other company.
Under the terms of the $3 million financing commitment, Optical Sensors
will immediately receive $1.4 million in cash. Receipt of the remaining $1.6
million is subject to the satisfaction of certain conditions, including approval
of the financing by Optical Sensors' shareholders at the company's annual
meeting in May.
"With these additional funds we will be continuing with our ongoing studies
comparing CapnoProbe data to various critical care parameters including
arterial-venous gap, cardiac output, lactate and other tissue CO2 devices. The
results of these tests are validating our original expectation of the CapnoProbe
as an important adjunctive measure of tissue hypoxia," LaPlante said. "The new
funds also give us valuable additional time to continue the technological
development of other applications of our core technology that are not covered by
our present negotiations for the CapnoProbe."
Optical Sensors currently has approximately 8,963,000 common shares
outstanding.
Except for historical information contained herein, the disclosures in this news
release are forward-looking statements which could be affected by certain risks
and uncertainties, including: successful development and market acceptance of
the CapnoProbe product; actions taken and alternative products introduced or
marketed by the Company's competitors; actions related to regulatory matters;
and the completion of a corporate alliance or business combination. These risks
are described in more detail in the Company's Annual Report on Form 10-K for the
year ended Dec. 31, 1998, and the Company's Forms 10-Q for the quarters ended
March 31, June 30, and Sept. 30, 1999.
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