UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest reported): January 16, 2007
CARDIMA, INC.
(Exact name of registrant as specified in charter)
Delaware 000-22419 94-3177883
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation or Organization) Identification No.)
47266 Benicia Street, Fremont, California, 94538
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 354-0300
Copies to:
Richard A. Friedman, Esq.
Sichenzia Ross Friedman Ference LLP
1065 Avenue of the Americas
New York, New York 10018
Phone: (212) 930-9700
Fax: (212) 930-9725
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01 Entry Into a Material Definitive Agreement
Item 2.03 Creation of a Direct Financial Obligation
On January 15, 2007, Cardima, Inc. (the "Company") entered into a new loan
facility term sheet with Apix International Limited ("Apix" or the "Lender"),
which provides for the roll-over of prior loan facilities and an additional loan
facility between the parties (the "New Facility"). As previously disclosed, on
August 26, 2005, Cardima entered into a $3,000,000 secured loan agreement with
Apix (the "First Facility"). Subsequently, on February 14, 2006, the Company
entered into a loan facility term sheet with Apix which provided for the
roll-over of the First Facility and the grant of an additional loan facility in
the amount of $660,000 (the "Second Facility"). Following completion of the
Second Facility, Apix continued to make additional advances to Cardima (the
"Further Advances")(the First Facility, Second Facility, and the Further
Advances shall collectively be referred to as the "Prior Facilities"). Through
December 14, 2006, the outstanding balance owing to Apix, including accrued
interest, exceeds $9,000,000 (the "Outstanding Balance").
The New Facility provides for the following terms and conditions:
o Additional Loan Facility. Apix has granted Cardima an additional loan facility
in the amount of $5,625,000. Advances pursuant to the additional facility shall
be made on a bi-monthly basis in denominations of $225,000 per advance (the "New
Draw Downs").
o New Maturity Date. The maturity date of the New Facility and Prior Facilities
is the earlier of (i) December 31, 2007 or (ii) the date that Apix makes a
demand for payment. o Interest Rate. The Outstanding Balance and the New Draw
Downs shall bear interest at the rate of 10% per annum.
o Facility Fee adjustment. The aggregate facility fee for the Prior Facilities
and the New Facility shall be $500,000 (the "Facility Fee").
o Exit Fees. The aggregate exit fees for the Prior Facilities and the New
Facility shall be $2,800,000. In addition, for each New Draw Down, there shall
be an additional exit fee of $80,000.
o Preferred Stock. In full and final satisfaction of the Facility Fee, and in
consideration of waiving existing defaults and extending the maturity date of
the outstanding loan amounts, Cardima shall issue five (5) million shares of
preferred stock to Apix (the "Preferred Stock"). The Preferred Stock shall carry
the following minimum preferences:
o 28 votes per share at any general or extraordinary meeting of the
common shares of the company convened by the Company or its
shareholders for a total of 140 million votes at any such meeting;
o Convertible into common shares of the Company at any time at the sole
and absolute discretion of the holder on the basis of two (2) common
shares for each preferred share tendered for conversion for a total of
ten (10) million common shares in the event all preferred shares are
tendered for conversion.
o Price Adjustment to Existing Warrant and New Warrants. Pursuant to the Prior
Facilities, the Company agreed to issue to Apix warrants to purchase 118,800,000
shares of the Company's common stock at an exercise price of $0.06 per share
(the "Existing Warrants"). Pursuant to the New Facility, the exercise price of
the Existing Warrants has been adjusted to $0.04 per share. In addition, the
Company has agreed to issue to Apix additional warrants at an exercise price of
$0.03 per share, as follows (i) 20,000,000 warrants for making the Further
Advances and entering into the New Facility, and (ii) 3,800,000 warrants for
each New Draw Down. All warrants have a term of ten years.
o Conversion Price Adjustment. The Outstanding Balance, New Draw Downs,
Interest, and Exit Fees are convertible into shares of the Company's common
stock at a conversion price of $0.04 per share.
o Registration Rights. The Company agrees to register a percentage of the shares
underlying the loan principal, facility fees, and warrants on a registration
statement that is to be filed no later than March 15, 2007.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description
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10.1 Loan Facility Term Sheet
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CARDIMA, INC.
Date: January 22, 2007 By: /s/ Gabriel B. Vegh
------------------------
Name: Gabriel B. Vegh
Chief Executive Officer,
Chief Financial Officer