UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
NEOSE TECHNOLOGIES, INC.
------------------------
(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
---------------------------------------
(Title of Class of Securities)
640522108
---------
(CUSIP Number)
James E. Kaye, Esq.
Akin Gump Strauss Hauer & Feld LLP
590 Madison Avenue
New York, New York 10022
(212) 872-1000
--------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 17, 2004
------------
(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 [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.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 13 Pages
Exhibit Index: Page 13
SCHEDULE 13D
CUSIP No. 640522108 Page 2 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MHR CAPITAL PARTNERS LP
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
7 Sole Voting Power
Number of 949,078
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 949,078
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
949,078
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
4.8%
14 Type of Reporting Person (See Instructions)
PN
SCHEDULE 13D
CUSIP No. 640522108 Page 3 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MRL PARTNERS LP
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)
AF
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
Number of 502,759
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 502,759
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
502,759
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
2.5%
14 Type of Reporting Person (See Instructions)
PN
SCHEDULE 13D
CUSIP No. 640522108 Page 4 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
OTT LLC
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)
Not Applicable
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
Number of 42,105
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 42,105
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
42,105
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
0.2%
14 Type of Reporting Person (See Instructions)
OO
SCHEDULE 13D
CUSIP No. 640522108 Page 5 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MHR ADVISORS LLC
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)
Not Applicable
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
Number of 0
Shares
Beneficially 8 Shared Voting Power
Owned By 1,451,837
Each
Reporting 9 Sole Dispositive Power
Person 0
With
10 Shared Dispositive Power
1,451,837
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,451,837
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[X]
13 Percent of Class Represented By Amount in Row (11)
7.3%
14 Type of Reporting Person (See Instructions)
OO
SCHEDULE 13D
CUSIP No. 640522108 Page 6 of 13 Pages
1 Names of Reporting Persons
I.R.S. Identification Nos. of above persons (entities only).
MARK H. RACHESKY, M.D.
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)
Not Applicable
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 of America
7 Sole Voting Power
Number of 1,566,671
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 1,566,671
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,566,671
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
[ ]
13 Percent of Class Represented By Amount in Row (11)
7.8%
14 Type of Reporting Person (See Instructions)
IN; HC
Page 7 of 13 Pages
This Amendment No. 1 to Schedule 13D relates to the Common
Stock, par value $0.01 per share (the "Shares") of Neose Technologies, Inc. (the
"Issuer"). This Amendment No. 1 supplementally amends the initial statement on
Schedule 13D, dated July 9, 1999 (the "Initial Statement"), filed by the
Reporting Persons (as defined herein). This Amendment No. 1 is being filed by
the Reporting Persons to report the number of Shares which the Reporting Persons
may be deemed to beneficially own has increased by more than one percent of the
current amount of outstanding Shares. Capitalized terms used but not defined
herein shall have the meanings ascribed to them in the Initial Statement. The
Initial Statement is supplementally amended as follows.
Item 2. Identity and Background
This Statement is being filed on behalf of each of the
following persons (collectively, the "Reporting Persons"):
(i) MHR Capital Partners LP ("MHR");
(ii) MRL Partners LP ("MRL");
(iii) OTT LLC ("OTT");
(iv) MHR Advisors LLC ("Advisors"); and
(v) Mark H. Rachesky, M.D. ("Dr. Rachesky")
This Statement relates to the Shares held for the accounts of
MHR, MRL, OTT and Dr. Rachesky. The general partner of MHR and MRL is Advisors.
Dr. Rachesky is the Managing Member of Advisors and OTT and, in such capacity,
may be deemed to having voting and dispositive power over the Shares and other
securities held for the accounts of MHR, MRL and OTT.
Item 3. Source and Amount of Funds or Other Consideration
MHR expended approximately $4,999,997 of its working capital
to purchase the securities reported herein as having been acquired since March
20, 2004 (60 days prior to the date hereof), as set forth in Annex A herein.
The securities held for the accounts of MHR, MRL, OTT and Dr.
Rachesky may be held through margin accounts maintained with brokers, which
extend margin credit as and when required to open or carry positions in their
margin accounts, subject to applicable federal margin regulations, stock
exchange rules and such firms' credit policies. The positions which may be held
in the margin accounts, including the Shares, may be pledged as collateral
security for the repayment of debit balances in the respective accounts.
Item 4. Purpose of Transaction
Dr. Rachesky serves on the board of directors of the Issuer.
As a director of the Issuer, Dr. Rachesky may have influence over the corporate
activities of the Issuer, including activities which may relate to items
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Page 8 of 13 Pages
The Reporting Persons reserve the right to acquire, or cause
to be acquired, additional securities of the Issuer, to dispose of, or cause to
be disposed, such securities at any time or to formulate other purposes, plans
or proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies of the Reporting
Persons, market conditions or other factors.
Item 5. Interest in Securities of the Issuer
According to information provided by the Issuer to the
Reporting Persons, there were 19,968,437 Shares outstanding as of May 18, 2004.
(a) (i) MHR may be deemed the beneficial owner of 949,078
Shares (approximately 4.8% of the total number of Shares outstanding). This
number consists of 949,078 Shares held for its account.
(ii) MRL may be deemed the beneficial owner of 502,759
Shares (approximately 2.5% of the total number of Shares outstanding). This
number consists of 502,759 Shares held for its account.
(iii) OTT may be deemed the beneficial owner of 42,105
Shares (approximately 0.2% of the total number of Shares outstanding). This
number consists of 42,105 Shares held for its account.
(iv) Advisors may be deemed the beneficial owner of
1,451,837 Shares (approximately 7.3% of the total number of Shares outstanding).
This number consists of A) 949,078 Shares held for the account of MHR, and
B) 502,759 Shares held for the account of MRL.
(v) Dr. Rachesky may be deemed the beneficial owner
of 1,566,671 Shares (approximately 7.8% of the total number of Shares
outstanding assuming the exercise of all presently-exercisable options held for
Dr. Rachesky's account). This number consists of A) 949,078 Shares held for the
account of MHR, B) 502,759 Shares held for the account of MRL, C) 42,105 Shares
held for the account of OTT, and D) 72,729 Shares issuable upon the exercise of
all options held for the account of Dr. Rachesky.
(b) (i) MHR may be deemed to have the sole power to direct the
voting and disposition of the 949,078 Shares which may be deemed to be
beneficially owned by MHR as described above.
(ii) MRL may be deemed to have the sole power to direct
the voting and disposition of the 502,759 Shares which may be deemed to be
beneficially owned by MRL as described above.
(iii) OTT may be deemed to have the sole power to direct
the voting and disposition of the 42,105 Shares which may be deemed to be
beneficially owned by OTT as described above.
(iv) Advisors may be deemed to have shared power to direct
the voting and disposition of the 1,451,837 Shares which may be deemed to be
beneficially owned by MHR and MRL as described above.
(iii) Dr. Rachesky may be deemed to have the sole power to
direct the voting and disposition of the 1,566,671 Shares which may be deemed to
be beneficially owned by MHR, MRL, OTT and Dr. Rachesky as described above.
Page 9 of 13 Pages
(c) Except for the transactions listed on Annex A hereto, all
of which were effected in a private transaction with the Issuer on May 17,
2004, there have been no transactions with respect to the Shares since March
20, 2004 (60 days prior to the date hereof) by any of the Reporting Persons.
(d) (i) The partners of MHR, including Advisors, have the
right to participate in the receipt of dividends from, or proceeds from the sale
of, the securities held for the account of MHR in accordance with their
partnership interests in MHR.
(ii) The partners of MRL, including Advisors, have the
right to participate in the receipt of dividends from, or proceeds from the sale
of, the securities held for the account of MRL in accordance with their
partnership interests in MRL.
(iii) The members of OTT have the right to participate in
the receipt of dividends from, or proceeds from the sale of, the securities held
for the account of OTT in accordance with their membership interests in OTT.
(e) As of the date hereof, each of MHR, MRL and OTT ceased to
be the beneficial owners of more than five percent of the Shares.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
On May 17, 2004, the Issuer entered into a subscription
agreement (the "Subscription Agreement") with MHR (the form of such agreement is
attached hereto as Exhibit 7.3 and incorporated herein by reference in response
to this Item 6). Pursuant to the Subscription Agreement, MHR purchased 738,552
Shares for a purchase price of $6.77. The offering and sale of the Shares by the
Issuer were made pursuant to a Registration Statement on Form S-3 (Registration
No. 333-106327).
From time to time each of the Reporting Persons may lend
portfolio securities to brokers, banks or other financial institutions. These
loans typically obligate the borrower to return the securities, or an equal
amount of securities of the same class, to the lender and typically provide that
the borrower is entitled to exercise voting rights and retain dividends during
the term of the loan. From time to time, to the extent permitted by applicable
law, each of the Reporting Persons may borrow securities, including the Shares,
for the purpose of effecting, and may effect, short sale transactions, and may
purchase securities for the purpose of closing out short sale positions in such
securities.
The foregoing descriptions of the Subscription Agreement does
not purport to be complete and are qualified in their entirety by the terms of
such document which is incorporated herein by reference.
Except as otherwise set forth herein, the Reporting Persons do
not have any contracts, arrangements, understandings or relationships with
respect to any securities of the Issuer.
Page 10 of 13 Pages
Item 7. Material to be filed as Exhibits.
The Exhibit Index is incorporated by reference.
Page 11 of 13 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this Statement is
true, complete and correct.
Date: May 19, 2004 MHR CAPITAL PARTNERS LP
By: MHR Advisors LLC,
its General Partner
By: /s/ Hal Goldstein
--------------------------
Name: Hal Goldstein,
Title: Vice President
MRL PARTNERS LP
By: MHR Advisors LLC,
its General Partner
By: /s/ Hal Goldstein
----------------------------
Name: Hal Goldstein,
Title: Vice President
OTT LLC
By: /s/ Hal Goldstein
----------------------------
Name: Hal Goldstein
Title: Authorized Signatory
MHR ADVISORS
By: /s/ Hal Goldstein
----------------------------
Name: Hal Goldstein,
Title: Vice President
MARK H. RACHESKY, M.D.
By: /s/ Mark H. Rachesky, M.D.
----------------------------
Page 12 of 13 Pages
ANNEX A
RECENT TRANSACTIONS IN THE SECURITIES OF
NEOSE TECHNOLOGIES, INC.
Date of Nature of Number of
For the Account of Transaction Transaction Securities Price
------------------ ----------- ----------- ---------- -----
MHR Capital Partners May 17, 2004 Buy 738,552 Shares $6.77
Page 13 of 13 Pages
EXHIBIT INDEX
Exhibit Page No.
------- --------
7.3 Form of the Subscription Agreement, by and between
Neose Technologies, Inc. and the Investor /1/
----------------------------------------
/1/ Filed on May 19, 2004 as Exhibit A to Exhibit 99.2 to the Issuer's
current report on Form 8-K (Commission File Number 000-27718)