SC 13D/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
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
February 7, 2006
(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 10
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CUSIP No. 226901106 -
----------------------------
---------- ---------------------------------------------------------------------
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 - 449,800
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 449,800
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
974,600
---------- ---------------------------------------------------------------------
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)
8.1%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
---------- ---------------------------------------------------------------------
Page 2 of 10
----------------------------
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 - 449,800
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 449,800
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
974,600
---------- ---------------------------------------------------------------------
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)
8.1%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO
---------- ---------------------------------------------------------------------
Page 3 of 10
----------------------------
CUSIP No. 226901106 -
----------------------------
---------- ---------------------------------------------------------------------
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 - 524,800
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 524,800
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
974,600
---------- ---------------------------------------------------------------------
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)
8.1%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
---------- ---------------------------------------------------------------------
Page 4 of 10
----------------------------
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 - 524,800
OWNED BY EACH - ----- ----------------------------------------------
REPORTING - 9 SOLE DISPOSITIVE POWER
PERSON - 0
WITH - ----- ----------------------------------------------
- 10 SHARED DISPOSITIVE POWER
- 524,800
--------------------------- ----- ----------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
974,600
---------- ---------------------------------------------------------------------
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)
8.1%
---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
OO
---------- ---------------------------------------------------------------------
Page 5 of 10
This Amendment No. 4 (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 California") on December 14,
2004 (the "Schedule 13D") and Amendment No. 1 to such filing made by the same
entities on April 11, 2005 and Amendment No. 2 filed on September 28, 2005 and
Amendment No. 3 filed on December 14, 2005 by the above named entities and
BlueLine Capital Partners, L.P ("BCP") and BlueLine Partners, L.L.C., a Delaware
limited liability company and the sole general Partner of BCP ("BlueLine
Partners") 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
No change.
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 974,600 shares of Common Stock (the "Shares"). The Shares
were purchased by BlueLine Catalyst and BCP in the open market with their
investment capital.
Item 4. Purpose of the Transaction
Item 4 is hereby amended to include the following:
The Reporting Entities invest in companies they believe are undervalued relative
to their potential. These are not companies that are broken, but rather, those
in situations where if certain issues were addressed and identified problems
fixed, the companies could be expected to trade at significantly higher values.
As part of each investment, the Reporting Entities identify these issues and
seek to work with management, the board of directors and other shareholders to
address and correct the problems and thereby create shareholder value. Because
BlueLine's perspective and advice relate to operational issues and not financial
engineering, BlueLine's participation is usually well received by other
stakeholders.
The Company is clearly performing better now than it did prior to BlueLine's
investment. Published analyst reports project that revenues will reach record
levels in fiscal year 2006 and the Company has reported three consecutive
quarters of profitable operations. In addition, management is to be commended
for the job it has done in creating opportunities around new products and recent
developments in the marketplace. There remains, however, significant room for
improvement in the areas of cost controls, financial planning and investor
relations. The Company must leverage top line growth to improve net margins and
increase its profitability.
Page 6 of 10
The Company must also exhibit greater control over its business and the message
it communicates to investors.
The Company's management has been promoting its product initiatives and new OEM
relationships for some time. Investors are growing impatient with promises of
future performance and the Company's management must begin delivering against
the expectations that it has set. To this end, the Reporting Entities have
advocated governance reforms and a greater role for the Company's board of
directors. A more active board should help management set priorities, produce
budgets and financial projections, develop a better defined investor message,
and, most importantly, hold management accountable if it fails to achieve
established performance metrics. This last item could be effectively done by
creating an executive compensation plan that links pay to performance. BlueLine
takes some encouragement from the recent appointment of a new director with
public company experience, but will continue to press for governance reforms
until it believes that the board will adhere to its own written governance
policies as well as accepted norms of good corporate governance.
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 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 974,600 shares of Common Stock. The Shares represent
approximately 8.1% of the shares of Common Stock outstanding based on
12,062,268 shares of the Company's Common Stock outstanding as reported in
the Company's report on Form 10-Q for the Company's fiscal quarter ended
September 30, 2005 as filed with the Securities and Exchange Commission on
November 10, 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. 4 to Schedule 13D: (i) BlueLine
Catalyst beneficially owns 449,800 shares of Common Stock with which
BlueLine Catalyst has shared voting power and shared dispositive power with
the other Reporting Entities; (ii) BlueLine California beneficially owns
449,800 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 524,800 shares of Common Stock with
which BCP has shared voting power and shared dispositive power with the
other Reporting Entities; and (iv) BlueLine Partners beneficially owns
524,800 shares of Common Stock with which BlueLine
Page 7 of 10
Partners 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
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.
* Incorporated by reference to the Amendment No. 2 Schedule 13D filed on
September 28, 2005.
Page 8 of 10
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: February 15, 2006
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 9 of 10
EXHIBIT B
Transactions in the Common Stock effected by the Reporting Entities during the
past sixty days.
BCP BlueLine Catalyst
Date No. of Shares Price per Share No. of Shares Price per Share
12/12/2005 -1,000 $4.70
12/12/2005 340,000 $4.54
12/16/2005 1,500 $4.94
12/27/2005 -3,000 $5.11
1/4/2006 500 $4.95
1/5/2006 1,000 $4.90
1/6/2006 1,000 $4.85
1/9/2006 1,000 $4.75
1/10/2006 1,000 $4.70
1/13/2006 1,700 $4.48
1/19/2006 2,000 $4.56
1/26/2006 -3,000 $4.59
1/27/2006 -3,000 $4.62
2/1/2006 -7,000 $5.18
2/6/2006 -6,000 $5.11
2/7/2006 -206,500 $5.30
2/9/2006 4,000 $4.88
2/13/2006 5,000 $4.80
Page 10 of 10