-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O56M/ugBjFgNozjV+InE7YlVE1qYVOha/aLIaxFS+r1Kg/0vCOWtzNEImUKgf1Fx E3Le21ydasHDle1EtpRu3Q== 0001214659-08-001524.txt : 20080702 0001214659-08-001524.hdr.sgml : 20080702 20080702090211 ACCESSION NUMBER: 0001214659-08-001524 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080702 DATE AS OF CHANGE: 20080702 GROUP MEMBERS: KEVIN C. TANG GROUP MEMBERS: TANG CAPITAL MANAGEMENT, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Northstar Neuroscience, Inc. CENTRAL INDEX KEY: 0001351509 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 911976637 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-82247 FILM NUMBER: 08931716 BUSINESS ADDRESS: STREET 1: 2401 FOURTH AVENUE STREET 2: SUITE 300 CITY: SEATTLE STATE: WA ZIP: 98121 BUSINESS PHONE: (206) 728-1477 MAIL ADDRESS: STREET 1: 2401 FOURTH AVENUE STREET 2: SUITE 300 CITY: SEATTLE STATE: WA ZIP: 98121 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TANG CAPITAL PARTNERS LP CENTRAL INDEX KEY: 0001191935 IRS NUMBER: 680517277 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 4401 EASTGATGE MALL CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 8582003830 MAIL ADDRESS: STREET 1: 4401 EASTGATE MALL CITY: SAN DIEGO STATE: CA ZIP: 92121 SC 13D/A 1 s7181sc13da6.htm AMENDMENT NO. 1 s7181sc13da6.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
( Amendment No. 1 )*

 
Northstar Neuroscience, Inc.
(Name of Issuer)
 
Common Stock, $0.001 par value per share
(Title of Class of Securities)
 
66704V101  
(CUSIP Number)
 
Kevin C. Tang
Tang Capital Management, LLC
4401 Eastgate Mall
San Diego, CA 92121
(858) 200-3830
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
 
July 2, 2008
(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 §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  x

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

* 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).

(Continued on following pages)
 
Page 1 of 6
 

CUSIP NO. 66704V101
13D
Page 2 of 6

1.
Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
 
Tang Capital Partners, LP
 
2.
Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ý
 
3.
SEC Use Only
 
 
4.
Source of Funds
 
WC
 
5.
Check If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or 2(e)   ¨
 
6.
Citizenship or Place of Organization
 
Delaware
 
Number of
Shares Beneficially
Owned by
Each Reporting
Person With
7.
Sole Voting Power
0
 
8.
Shared Voting Power
4,757,038
 
9.
Sole Dispositive Power
0
 
10.
Shared Dispositive Power
4,757,038
 
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
4,757,038
 
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares   ¨
 
13.
Percent of Class Represented by Amount in Row (11)
18.2%
 
14
Type of Reporting Person
 
PN
 

Page 2 of 6

CUSIP NO. 66704V101
13D
Page 3 of 6

1.
Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
 
Tang Capital Management, LLC
 
2.
Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ý
 
3.
SEC Use Only
 
 
4.
Source of Funds
 
WC
 
5.
Check If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or 2(e)   ¨
 
6.
Citizenship or Place of Organization
 
Delaware
 
Number of
Shares Beneficially
Owned by
Each Reporting
Person With
7.
Sole Voting Power
0
 
8.
Shared Voting Power
4,757,038
 
9.
Sole Dispositive Power
0
 
10.
Shared Dispositive Power
4,757,038
 
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
4,757,038
 
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares   ¨
 
13.
Percent of Class Represented by Amount in Row (11)
18.2%
 
14
Type of Reporting Person
 
OO
 

Page 3 of 6

CUSIP NO. 66704V101
13D
Page 4 of 6

1.
Names of Reporting Persons.
I.R.S. Identification Nos. of above persons (entities only).
 
Kevin C. Tang
 
2.
Check the Appropriate Box if a Member of a Group
(a) ¨
(b) ý
 
3.
SEC Use Only
 
 
4.
Source of Funds
 
PF, WC, OO
 
5.
Check If Disclosure of Legal Proceeding Is Required Pursuant to Items 2(d) or 2(e)   ¨
 
6.
Citizenship or Place of Organization
 
United States
 
Number of
Shares Beneficially
Owned by
Each Reporting
Person With
7.
Sole Voting Power
145,000
 
8.
Shared Voting Power
4,967,038
 
9.
Sole Dispositive Power
145,000
 
10.
Shared Dispositive Power
5,060,038
 
11.
Aggregate Amount Beneficially Owned by Each Reporting Person
5,205,038
 
12.
Check if the Aggregate Amount in Row (11) Excludes Certain Shares   ¨
 
13.
Percent of Class Represented by Amount in Row (11)
19.9%
 
14
Type of Reporting Person
 
IN
 

Page 4 of 6
 
Explanatory Note: This Amendment No. 1 relates to and amends the Statement of Beneficial Ownership on Schedule 13D of Tang Capital Partners, LP, a Delaware partnership (“Tang”), Tang Capital Management, LLC, a Delaware limited liability company and Kevin C. Tang, a United States citizen (each, a “Reporting Person” and collectively, the “Reporting Persons”), initially filed jointly by the Reporting Persons with the Securities and Exchange Commission on May 16, 2008 (the “Statement”), with respect to the Common Stock, $0.001 par value (the “Common Stock”), of Northstar Neuroscience, Inc., a Washington corporation (the “Issuer”).

Items 4 and 7 of the Statement are hereby amended to the extent hereinafter expressly set forth.  All capitalized terms used and not expressly defined herein have the respective meanings ascribed to such terms in the Statement.

Item 4. Purpose of Transaction
 
Item 4 of the Statement is hereby amended to add the following:

On July 2, 2008, Tang sent to the Board of Directors of the Issuer a letter dated July 2, 2008, proposing to acquire the Issuer for a cash purchase price of $2.25 per share (the “Proposal”).  A copy of the Proposal is filed herewith as Exhibit 2 and is incorporated herein in its entirety by reference.  On July 2, 2008, Tang issued a press release announcing the Proposal.

The Reporting Persons intend to review their investment in the Issuer on a continuing basis and to engage in further discussions with the Issuer’s senior executives and members of the Board concerning the Proposal.  The Reporting Persons may, from time to time, communicate with other shareholders of the Issuer, industry analysts and other constituents concerning the foregoing and to express their views of the Issuer and its management and Board of Directors.  If Tang is successful in acquiring the Issuer, it anticipates that it may implement a number of changes relating to the matters referred to in clauses (c) through (j) of Item 4 of Schedule 13D, including the sale or transfer of assets of the Issuer, a change in the board of directors and management of the Issuer, a change in the Issuer’s business, changes in the Issuer’s charter and bylaws and causing the Issuer’s securities to be delisted from Nasdaq.

The Proposal and ensuing discussions could result in a transaction in which Tang obtains control of Issuer.  No assurances can be given that any agreement with the Issuer relating to the Proposal will be entered into or that the transaction contemplated by the Proposal will be consummated.  The Proposal is non-binding, and no binding obligation shall arise with respect to the Proposal unless and until a mutually acceptable definitive merger agreement has been executed and delivered.  If a merger agreement is executed, consummation of the transaction will be subject to various conditions, including customary closing conditions.  Under applicable law, implementation of the Proposal will require approval of the Board of Directors of the Issuer and the approval of two-thirds of the shareholders of the Issuer unaffiliated with the Reporting Persons.

Item 7.  Material to be Filed as Exhibits

Item 7 of the Statement is hereby amended to add the following:

Exhibit 2:     Letter from Tang Capital Partners, LP to the Board of Directors of Northstar Neuroscience, Inc., dated July 2, 2008.
 
Page 5 of 6
 
 
SIGNATURES
 
After reasonable inquiry and to the best of his or its knowledge and belief, each of the following Reporting Persons certifies that the information set forth in this statement is true, complete and correct.
 

 Date:   July 2, 2008
 
TANG CAPITAL PARTNERS, LP
   
By:  Tang Capital Management, LLC
   
By:      /s/ Kevin C. Tang  
  Kevin C. Tang, Managing Member
   
  
TANG CAPITAL MANAGEMENT, LLC
   
By:     /s/ Kevin C. Tang 
  Kevin C. Tang, Managing Member
   
   
/s/ Kevin C. Tang 
Kevin C. Tang
 
 
Page 6 of 6
 
 EX-2 2 ex2.htm ex2.htm
Exhibit 2
 
Letter from Tang Capital Partners, LP to the Board of Directors
of Northstar Neuroscience, Inc., dated July 2, 2008.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tang Capital Management, LLC
4401 Eastgate Mall, San Diego, CA 92121
(858) 200-3830 Fax (858) 200-3837




July 2, 2008

Board of Directors
c/o Alan Levy, Ph.D., Chairman of the Board
Northstar Neuroscience, Inc.
2401 Fourth Avenue, Suite 300
Seattle, Washington  98121

Dear Members of the Board of Directors,

As a follow-up to recent discussions with management of Northstar Neuroscience, Inc. (“Northstar”), I am writing this letter to set forth a proposal by Tang Capital Partners, LP (“Tang”) to acquire Northstar in a negotiated transaction between Tang and Northstar.  This is not a proposal to acquire the stock of Northstar directly from the shareholders in a tender offer.

To date, we have had access only to Northstar’s publicly available information.  Based on that information, we are proposing to acquire Northstar for $2.25 per share in cash.  This proposal would unlock significant value for Northstar’s shareholders and is a compelling value proposition in that it represents a 50% premium to the closing sale price of Northstar’s common stock on July 1, 2008 and an approximate 47% premium to Northstar’s volume-weighted average trading price since January 22, 2008, when Northstar announced its EVEREST clinical trial results.

While the transaction would be subject to customary closing conditions, including the approval of Northstar shareholders under Northstar’s charter documents and applicable law, and very limited confirmatory due diligence, it would not be subject to any financing condition.

As Northstar’s largest shareholder, holding approximately 18% of Northstar’s outstanding common stock, we have spent considerable time analyzing Northstar and its options.  We strongly believe that the best course of action for Northstar and its shareholders is for Northstar to be acquired in a transaction that represents a significant premium to its current market price.  However, the window for consummating any such transaction is limited; if the Board is to prevent further erosion of Northstar’s value, it must act quickly.  Accordingly, this non-binding proposal is contingent on our receipt of a positive response on or before July 9, 2008 and Northstar entering into a binding definitive merger agreement on or before July 23, 2008.

Our proposal provides Northstar shareholders an immediate and certain path to a premium, all-cash transaction that will eliminate future market risk as well as the risk of future erosion in value.  We believe that the vast majority of other Northstar shareholders will agree and expect this proposal to be readily approved by them.  We encourage Northstar’s Board to work with us to finalize a definitive merger agreement and bring the transaction to a shareholder vote as quickly as possible .

 
We value the input of the Board and management when considering Northstar’s strategic alternatives and have tried on several occasions to have constructive, confidential discussions with management regarding these alternatives.  So far, management has been unwilling to entertain such discussions except under conditions that would make it impossible for us to protect the value of our significant investment in Northstar.  We have made this proposal now because of our belief that this is the only remaining path to protect that investment.

We expect the Board to consider our proposal seriously and expeditiously.  We are, of course, available to meet with the Board and management at any time and immediately begin negotiations of a definitive agreement.  We look forward to a prompt and favorable response.

Sincerely,

Tang Capital Partners, LP
by: Tang Capital Management, LLC, its general partner

 

/s/ Kevin C. Tang
 
Kevin C. Tang
 
Managing Member
 
 

 
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