Sch 13D/A for Blue Line
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)
Criticare Systems, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
226901106
(CUSIP Number)
Scott A. Shuda
BlueLine Partners, LLC
4115 Blackhawk Plaza Circle, Suite 100
Danville, California 94506
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
James C. Creigh
Blackwell Sanders Peper Martin LLP
1620 Dodge Street, Suite 2100
Omaha, Nebraska 68102
(402) 964-5000
September 23, 2005
(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 that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the
following box [ ].
Page 1 of 12
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CUSIP No. 226901106
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1 NAME OF REPORTING PERSON/
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
BlueLine Catalyst Fund VII, L.P.
---------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
2 Instructions) (a) [ ]
(b) [ X ]
---------- ---------------------------------------------------------------------
3 SEC USE ONLY
---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------- ----- ----------------------------------------------
- 7 SOLE VOTING POWER
- 0
NUMBER OF - ----- ----------------------------------------------
SHARES - 8 SHARED VOTING POWER
BENEFICIALLY - 670,300
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 670,300
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
736,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
(See Instructions)
---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
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Page 2 of 12
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CUSIP No. 226901106
--------------------------------------------------------------------------------
---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON/
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
BlueLine Partners, L.L.C.
---------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
2 Instructions) (a) [ ]
(b) [ X ]
---------- ---------------------------------------------------------------------
3 SEC USE ONLY
---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
--------------------------- ----- ----------------------------------------------
- 7 SOLE VOTING POWER
- 0
NUMBER OF - ----- ----------------------------------------------
SHARES - 8 SHARED VOTING POWER
BENEFICIALLY - 670,300
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 670,300
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
736,000
---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
(See Instructions)
---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO
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Page 3 of 12
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CUSIP No. 226901106
--------------------------------------------------------------------------------
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1 NAME OF REPORTING PERSON/
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
BlueLine Capital Partners, L.P.
---------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
2 Instructions) (a) [ ]
(b) [ X ]
---------- ---------------------------------------------------------------------
3 SEC USE ONLY
---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------- ----- ----------------------------------------------
- 7 SOLE VOTING POWER
- 0
NUMBER OF - ----- ----------------------------------------------
SHARES - 8 SHARED VOTING POWER
BENEFICIALLY - 65,700
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 65,700
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
736,000
---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
(See Instructions)
---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
---------- ---------------------------------------------------------------------
Page 4 of 12
--------------------------------------------------------------------------------
CUSIP No. 226901106
--------------------------------------------------------------------------------
---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON/
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (entities only)
BlueLine Partners, L.L.C.
---------- ---------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
2 Instructions) (a) [ ]
(b) [ X ]
---------- ---------------------------------------------------------------------
3 SEC USE ONLY
---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------- ----- ----------------------------------------------
- 7 SOLE VOTING POWER
- 0
NUMBER OF - ----- ----------------------------------------------
SHARES - 8 SHARED VOTING POWER
BENEFICIALLY - 65,700
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 65,700
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
736,000
---------- ---------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
(See Instructions)
---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.2%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO
---------- ---------------------------------------------------------------------
Page 5 of 12
This Amendment No. 2 (this "Amendment") amends and supplements the
statement on Schedule 13D filed by BlueLine Catalyst Fund VII, L.P. ("BlueLine
Catalyst") and BlueLine Partners, L.L.C. ("BlueLine Partners") on December 14,
2004 (the "Schedule 13D") and Amendment No. 1 to such filing made by the same
entities on April 11, 2005 relating to the common stock (the "Common Stock") of
Criticare Systems, Inc. (the "Company"). Items designated as "no change"
indicate that the information previously included in the Schedule 13D remains
current as of the date of this Amendment.
Item 1. Security and Issuer
No change.
Item 2. Identity and Background
Item 2 is hereby amended and restated to read as follows:
(a)-(b) This statement is filed on behalf of BlueLine Catalyst Fund VII, L.P.
("BlueLine Catalyst VII"), BlueLine Capital Partners, L.P ("BCP"),
BlueLine Partners, L.L.C., a California limited liability company and
the sole general partner of BlueLine Catalyst VII ("BlueLine
California"), and BlueLine Partners, L.L.C., a Delaware limited
liability company and the sole general Partner of BCP ("BlueLine
Delaware"). BlueLine Catalyst, BCP, BlueLine California and BlueLine
Delaware are referred to herein collectively as the "Reporting
Entities". BlueLine California has an interest in the profits of
BlueLine Catalyst and BlueLine Delaware has an interest in the profits
of BCP. Timothy Bacci and Scott Shuda are both Managing Directors of
each of BlueLine California and BlueLine Delaware. Messrs. Bacci and
Shuda each disclaims beneficial ownership for purposes of Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Act"). The
address of the principal business office of each of the Reporting
Entities and Messrs. Bacci and Shuda is 4115 Blackhawk Plaza Circle,
Suite 100, Danville, California 94506.
Page 6 of 12
(c) Both BlueLine Catalyst VII and BCP are private investment limited
partnerships. The principal business of BlueLine California is to
serve as investment manager to BlueLine Catalyst VII. The principal
business of BlueLine Delaware is to serve as investment manager to a
variety of private investment funds, including BCP. BlueLine
California and BlueLine Delaware control the investing and trading in
securities of BlueLine Catalyst VII and BCP, respectively. The
principal business of Messrs. Bacci and Shuda is to act as Managing
Directors of BlueLine California and BlueLine Delaware (together
referred to herein as "BlueLine Partners").
(d) None of the Reporting Entities nor Messrs. Bacci and Shuda has, during
the last five years, been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) None of the Reporting Entities nor Messrs. Bacci and Shuda 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.
(f) Both BlueLine Catalyst VII and BCP are Delaware limited partnerships.
BlueLine California is a California limited liability company.
BlueLine Delaware is a Delaware limited liability company. Messrs.
Bacci and Shuda are each U.S. citizens.
Item 3. Source and Amount of Funds
Item 3 is hereby amended and restated to read as follows:
As of the date hereof, the Reporting Entities may, in the aggregate, be deemed
to beneficially own 736,000 shares of Common Stock (the "Shares"). The Shares
were purchased by BlueLine Catalyst VII and BCP in the open market with their
investment capital.
Item 4. Purpose of the Transaction
Item 4 is hereby amended and restated to read as follows:
BlueLine Partners and its affiliated investment entities, including BCP and
BlueLine Catalyst VII, seek to make investments in companies that are
undervalued relative to their potential and in situations where they believe
their efforts can help to create or unlock value. As part of its investment
strategy, BlueLine Partners has made contact with members of management and the
board of directors of the Company to discuss areas where it believes performance
can be improved. Principal among these are: (i) better managing the Company's
cost structure so that it can become consistently profitable and (ii) improving
governance practices by, among other things, increasing the participation of the
Company's board of directors.
Page 7 of 12
The Reporting Entities believe that the company has made progress in its efforts
to reduce fixed costs. In coming quarters, BlueLine Partners hopes to continue
working with the Company to effect similar operating improvements in the area of
variable costs.
Unfortunately, similar reforms have not yet occurred with respect to the
Company's governance practices. BlueLine Partners believes governance reforms
are critical to the Company's future. Recent developments have raised
expectations for the Company, but many potential investors and analysts remain
wary given the Company's long history of underperformance. Only the board of
directors has the opportunity and the power to provide the oversight necessary
during the coming quarters. Such oversight depends upon motivated individuals
and established policies and procedures.
Since their investment began in July 2004, the Reporting Entities have sought a
dialog with members of the Company's board of directors in an effort to
communicate the perspective of outside shareholders and the importance of proper
governance practices. Having seen little effect from this private dialog with
the Company's board members, the Reporting Entities now wish to initiate a
public discussion on the need for oversight and governance reforms at the
Company. The Reporting Entities expect this discussion to continue through the
Company's annual meeting of shareholders scheduled for December 1, 2005 in
Waukesha, Wisconsin. Representatives of the Reporting Entities will attend this
meeting and be prepared to question why the minimal reforms listed below have
not been adopted.
Governance reforms that the Reporting Entities would like to see adopted and
instituted as soon as possible include:
(1) consideration of new independent board members and the rotation off the
board of existing board members who are not prepared to substantially
increase their involvement with the Company;
(2) reforms to the nominating and corporate governance committee to improve
monitoring of the changing regulatory environment for public companies and
ensure the Company's compliance with best practices;
(3) reforms to the Company's audit committee procedures to provide independent
oversight of the Company's accounting practices and assure the
appropriateness of and compliance with the Company's accounting policies;
(4) reforms to the compensation committee to establish a performance-based
compensation plan for the Company's executive officers to better align the
interests of management with those of the shareholders;
(5) regular, in-person board meetings scheduled with sufficient notice to
permit travel and advance review of agenda items;
(6) executive sessions as part of every regularly scheduled board meetings; and
(7) succession planning for management and the board of directors.
Depending on market conditions, general economic conditions and other factors,
including the degree of their participation in the Company's business affairs,
the Reporting Entities may purchase additional shares of Common Stock in the
open market or in private transactions, or
Page 8 of 12
may dispose of all or a portion of the shares of Common Stock that they or any
of them presently own or may hereafter acquire
Item 5. Interest in Securities of the Issuer
Item 5 is hereby amended and restated to read as follows:
(a) As of the date of this Amendment, each of the Reporting Entities may be
deemed to own 736,000 shares of Common Stock. The Shares represent
approximately 6.2% of the shares of Common Stock outstanding based on
11,823,629 shares of the Company's Common Stock outstanding as reported in
the Company's Annual Report on Form 10-K for the Company's fiscal year
ended June 30, 2005 as filed with the Securities and Exchange Commission on
September 12, 2005.
The Reporting Entities 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. Each Reporting Entity expressly disclaims beneficial
ownership of any of the shares of Common Stock other than those reported
herein as being owned by it.
(b) As of the date of this Amendment No. 2 to Schedule 13D: (i) BlueLine
Catalyst VII beneficially owns 670,300 shares of Common Stock with which
BlueLine Catalyst VII has shared voting power and shared dispositive power
with the other Reporting Entities; (ii) BlueLine California beneficially
owns 670,300 shares of Common Stock with which BlueLine California has
shared voting power and shared dispositive power with the other Reporting
Entities; (iii) BCP beneficially owns 65,700 shares of Common Stock with
which BCP has shared voting power and shared dispositive power with the
other Reporting Entities; and (iv) BlueLine Delaware beneficially owns
65,700 shares of Common Stock with which BlueLine Delaware has shared
voting power and shared dispositive power with the other Reporting
Entities.
(c) Information concerning transactions in the Common Stock effected by the
Reporting Entities during the past sixty days is set forth in Exhibit B
hereto and is incorporated by this reference. All of the transactions set
forth in Exhibit B were open market transactions for cash.
(d) No person (other than the Reporting Entities) is known to have the right to
receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Shares.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
No change.
Item 7. Materials to be Filed as Exhibits
Page 9 of 12
1. Exhibit A - Joint Filing Agreement dated September 28, 2005, signed by each
of the Reporting Entities.
2. Exhibit B - Transactions in the Common Stock by the Reporting Entities
during the past 60 days.
SIGNATURES
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.
Date: September 28, 2005
BlueLine Catalyst Fund VII, L.P.
By: BlueLine Partners, L.L.C.
Its: General Partner
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Partners, L.L.C.
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Capital Partners, L.P.
By: BlueLine Partners, L.L.C.
Its: General Partner
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Partners, L.L.C.
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
Page 10 of 12
EXHIBIT A
Joint Filing Agreement
The undersigned acknowledge and agree that the foregoing statement on Schedule
13D is filed on behalf of each of the undersigned and that all subsequent
amendments to this statement on Schedule 13D shall be filed on behalf of each of
the undersigned without the necessity of filing additional joint filing
agreements. The undersigned acknowledge that each shall be responsible for the
timely filing of such amendments, and for the completeness and accuracy of the
information concerning it contained therein, but shall not be responsible for
the completeness and accuracy of the information concerning the others, except
to the extent it knows or has reason to believe that such information is
inaccurate. This Joint Filing Agreement may be executed in any number of
counterparts and all of such counterparts taken together shall constitute one
and the same instrument.
Date: September 28, 2005
BlueLine Catalyst Fund VII, L.P.
By: BlueLine Partners, L.L.C.
Its: General Partner
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Capital Partners, L.P.
By: BlueLine Partners, L.L.C.
Its: General Partner
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Partners, L.L.C.
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
BlueLine Partners, L.L.C.
By: /s/ Scott Shuda
--------------------------------------
Name: Scott Shuda
Title: Manager
Page 11 of 12
EXHIBIT B
Transactions in the Common Stock effected by the Reporting Entities during the
past sixty days.
BlueLine Catalyst VII BCP
Date No. of Shares Price per Share No. of Shares Price per Share
8/3/05 4500 $ 4.67
8/4/05 4400 $ 4.62
8/10/05 2300 $ 4.52
8/11/05 8500 $ 4.46
8/15/05 7100 $ 4.39
8/16/05 1000 $ 4.36
8/17/05 3600 $ 4.19
8/18/05 2700 $ 4.05
8/19/05 5300 $ 4.10
8/22/05 4100 $ 4.50
8/23/05 1500 $ 4.73
8/29/05 1000 $ 5.07
8/31/05 100 $ 5.09
9/6/05 -800 $ 5.18
9/7/05 -1200 $ 5.29
9/12/05 -2000 $ 5.50 1000 $ 5.04
9/13/05 -1200 $ 5.08
9/14/05 1000 $ 5.00
9/15/05 1000 $ 5.01
9/16/05 4200 $ 5.00
9/20/05 100 $ 5.08
9/22/05 2000 $ 5.00
Page 12 of 12