0000950136-01-501683.txt : 20011101 0000950136-01-501683.hdr.sgml : 20011101 ACCESSION NUMBER: 0000950136-01-501683 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20011030 GROUP MEMBERS: ESSEX WOODLANDS HEALTH VENTURES FUND IV, LP GROUP MEMBERS: ESSEX WOODLANDS HEALTH VENTURES IV, LLC GROUP MEMBERS: JAMES L. CURRIE GROUP MEMBERS: MARC S. SANDROFF GROUP MEMBERS: MARTIN P. SUTER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HEALTH GRADES INC CENTRAL INDEX KEY: 0001027915 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-OFFICES & CLINICS OF DOCTORS OF MEDICINE [8011] IRS NUMBER: 621623449 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-58765 FILM NUMBER: 1770086 BUSINESS ADDRESS: STREET 1: 44 UNION BLVD STREET 2: STE 600 CITY: LAKEWOOD STATE: CO ZIP: 80228 BUSINESS PHONE: 3037160041 MAIL ADDRESS: STREET 1: 44 UNION BOULEVARD STREET 2: SUITE 600 CITY: LAKEWOOD STATE: CO ZIP: 80228 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHGRADES COM INC DATE OF NAME CHANGE: 20000118 FORMER COMPANY: FORMER CONFORMED NAME: SPECIALTY CARE NETWORK INC DATE OF NAME CHANGE: 19961210 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ESSEX WOODLANDS HEALTH VENTURES FUND IV LLC CENTRAL INDEX KEY: 0001081190 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 760573320 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 270 BUCKTHORNE PLACE STREET 2: SUITE 170 CITY: WOODLANDS STATE: TX ZIP: 77380 BUSINESS PHONE: 2813679999 MAIL ADDRESS: STREET 1: 2170 BUCKTHORNE PLACE STREET 2: SUITE 170 CITY: WOODLANDS STATE: TX ZIP: 77380 SC 13D/A 1 file001.txt AMENDMENT TO SCHEDULE 13D ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 2)* Health Grades, Inc. -------------------------------------------------------------------------------- (Name of Issuer) Common Stock -------------------------------------------------------------------------------- (Title of Class of Securities) 84748M 10 2 -------------------------------------------------------------------------------- (CUSIP Number) Marc S. Sandroff Essex Woodlands Health Ventures 190 S. LaSalle, Suite 2800 Chicago, Illinois 60603 (312) 444-6040 -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 9, 2001 -------------------------------------------------------------------------------- (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 ss.ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [ ] * 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 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP No.: 84748M 10 2 -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). ESSEX WOODLANDS HEALTH VENTURES FUND IV, L.P. -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See 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 -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 9,947,430 Shares ------------------------------------------------------------------ Beneficially 8. Shared Voting Power -0- Owned by ------------------------------------------------------------------ Each 9. Sole Dispositive Power 9,947,430 Reporting ------------------------------------------------------------------ Person With 10. Shared Dispositive Power -0- -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,947,430 -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): [ ] -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 27.62% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): PN -------------------------------------------------------------------------------- CUSIP No.: 84748M 10 2 -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). ESSEX WOODLANDS HEALTH VENTURES IV, L.L.C. -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See 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 -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 9,947,430 Shares ------------------------------------------------------------------ Beneficially 8. Shared Voting Power -0- Owned by ------------------------------------------------------------------ Each 9. Sole Dispositive Power 9,947,430 Reporting ------------------------------------------------------------------ Person With 10. Shared Dispositive Power -0- -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,947,430 -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): [ ] -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 27.62% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): OO -------------------------------------------------------------------------------- CUSIP No.: 84748M 10 2 -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). JAMES L. CURRIE -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See Instructions): (a) [ ] (b) [X] -------------------------------------------------------------------------------- 3. SEC Use Only: -------------------------------------------------------------------------------- 4. Source of Funds (See Instructions): SC -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e): [ ] -------------------------------------------------------------------------------- 6. Citizenship or Place of Organization: UNITED STATES -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 0 Shares ------------------------------------------------------------------ Beneficially 8. Shared Voting Power 9,947,430 Owned by ------------------------------------------------------------------ Each 9. Sole Dispositive Power 0 Reporting ------------------------------------------------------------------ Person With 10. Shared Dispositive Power 9,947,430 -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,947,430 -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): [ ] -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 27.62% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IN -------------------------------------------------------------------------------- CUSIP No.: 84748M 10 2 -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). MARC S. SANDROFF -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See 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: UNITED STATES -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 0 Shares ------------------------------------------------------------------ Beneficially 8. Shared Voting Power 9,947,430 Owned by ------------------------------------------------------------------ Each 9. Sole Dispositive Power 0 Reporting ------------------------------------------------------------------ Person With 10. Shared Dispositive Power 9,947,430 -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,947,430 -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): [ ] -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 27.62% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IN -------------------------------------------------------------------------------- CUSIP No.: 84748M 10 2 -------------------------------------------------------------------------------- 1. Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only). MARTIN P. SUTTER -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group (See 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: UNITED STATES -------------------------------------------------------------------------------- Number of 7. Sole Voting Power 0 Shares ------------------------------------------------------------------ Beneficially 8. Shared Voting Power 9,947,430 Owned by ------------------------------------------------------------------ Each 9. Sole Dispositive Power 0 Reporting ------------------------------------------------------------------ Person With 10. Shared Dispositive Power 9,947,430 -------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person: 9,947,430 -------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): [ ] -------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11): 27.62% -------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions): IN -------------------------------------------------------------------------------- This Amendment No. 2 amends and supplements the Schedule 13D originally filed on March 27, 2000 (the "Schedule 13D"), as amended by Amendment No. 1 to the Schedule 13D filed on May 1, 2001 ("Amendment No. 1") by the undersigned relating to the shares of common stock, $0.001 par value per share, (the "Common Stock") of Health Grades, Inc. (the "Company"). Unless indicated otherwise, all defined terms used herein shall have the respective meanings ascribed to them in the Schedule 13D. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION Item 3 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof: On October 9, 2001 the Company exercised the put option from Essex Fund in accordance with the agreement between the Company, Essex Fund and another investor, executed on April 16, 2001 to provide equity financing to the Company of up to $2,000,000. Under the agreement, the Company has sold Essex Fund 5,544,000 shares of Common Stock at $0.15 per share for an aggregate purchase price of $831,600, the maximum amount under the agreement, and issued to Essex Fund a warrant to purchase 145,530 shares of Common Stock at an exercise price of $0.15 per share for six years. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 of the Schedule 13D is hereby amended and restated in its entirety as follows: TOTAL OUTSTANDING SHARES. According to information provided to the Filing Persons by the Company, the number of shares of Common Stock outstanding on October 10, 2001 was 34,606,758 and the number of shares of Common Stock subject to warrants held by Essex Fund was 1,403,430 for a total of 36,010,188 shares outstanding. ESSEX FUND. As of the date of filing of this Schedule 13D, Essex Fund is the holder of record of 9,947,430 shares of Common Stock of the Company, consisting of 8,544,000 shares of Common Stock and warrants to purchase 1,403,430 shares of Common Stock exercisable within 60 days hereof, representing approximately 27.62% of the outstanding Common Stock, and has sole voting and investment power with respect to such securities. ESSEX L.L.C. ESSEX L.L.C., as sole General Partner of Essex Fund, may also be deemed to have sole voting and investment power with respect to such securities. Essex L.L.C. disclaims beneficial ownership of such securities except to the extent of its pecuniary interest therein. MESSRS. CURRIE, SANDROFF AND SUTTER. Under the operating agreement of Essex L.L.C., Messrs. Currie, Sandroff and Sutter have the power by unanimous consent (i) to cause the Essex Fund to buy and sell marketable securities of portfolio companies and (ii) to direct the voting of such securities. As a result, Messrs. Currie, Sandroff and Sutter may also be deemed to have shared dispositive power and shared voting power with respect to the securities held by Essex Fund. Messrs. Currie, Sandroff and Sutter disclaim beneficial ownership of such securities except to the extent of their respective pecuniary interests therein. On October 9, 2001, Essex Fund acquired a warrant to purchase 145,530 shares of Common Stock from the Company. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 of the Schedule 13D is hereby amended and supplemented by adding the following at the end thereof: On October 9, 2001, the Company exercised the put option from Essex Fund and sold 5,544,000 shares of Common Stock to Essex Fund for an aggregate purchase price of $831,600, the maximum amount under the put option. The shares were sold at $0.15 per share. In addition, the Company issues Essex Fund a warrant to purchase 145,530 shares of Common Stock at an exercise price of $0.15 per share for six years. EXHIBIT INDEX NO. DESCRIPTION OF EXHIBIT --- ---------------------- Exhibit A Agreement of Joint Filing, dated October 30, 2001, among the Filing Persons. Exhibit B Co-Sale and Voting Agreement, dated March 17, 2000, previously filed. Exhibit C Letter Agreement, dated April 16, 2001, previously filed. EXHIBIT A AGREEMENT REGARDING JOINT FILING In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agrees to the joint filing on behalf of each of them of a Statement on Schedule 13D as promulgated by the SEC, including any pertinent amendments thereto, and including, where applicable, additions or deletions to the group represented by the undersigned, with respect to the Common Stock, $0.001 par value per share, of Health Grades, Inc., and that this Agreement be included as an Exhibit to such filing. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to constitute one and the same Agreement. IN WITNESS WHEREOF, each of the undersigned hereby executes this Agreement as of October 30, 2001. ESSEX WOODLANDS HEALTH VENTURES FUND IV, L.P. By its general partner: Essex Woodlands Health Ventures IV, L.L.C. By: /s/ Marc S. Sandroff ------------------------------- Name: Marc S. Sandroff Its: Managing Director ESSEX WOODLANDS HEALTH VENTURES IV, L.L.C. By: /s/ Marc S. Sandroff ------------------------------- Name: Marc S. Sandroff Its: Managing Director /s/ James L. Currie ---------------------------------- James L. Currie /s/ Marc S. Sandroff ---------------------------------- Marc S. Sandroff /s/ Martin P. Sutter ---------------------------------- Martin P. Sutter SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this amended statement is true, complete and correct. Date: October 30, 2001 ESSEX WOODLANDS HEALTH VENTURES FUND IV, L.P. By its general partner: Essex Woodlands Health Ventures IV, L.L.C. By: /s/ Marc S. Sandroff -------------------------------- Name: Marc S. Sandroff Its: Managing Director ESSEX WOODLANDS HEALTH VENTURES IV, L.L.C. By: /s/ Marc S. Sandroff -------------------------------- Name: Marc S. Sandroff Its: Managing Director /s/ James L. Currie ----------------------------------- James L. Currie /s/ Marc S. Sandroff ----------------------------------- Marc S. Sandroff /s/ Martin P. Sutter ----------------------------------- Martin P. Sutter