UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K/A
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 22, 2005
VIKING SYSTEMS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
000-49636 86-0913802
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(Commission File Number) (IRS Employer Identification No.)
7514 Girard Ave., Ste. 1509, La Jolla, CA 92037
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(Address of Principal Executive Offices) (Zip Code)
858-456-6608
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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):
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|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
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|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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|_| 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
On March 22, 2005 Viking Systems, Inc. ("Viking") entered into a Securities
Purchase Agreement and related agreements (the "Transaction Documents"), among
(i) Viking, (ii) St. Cloud Capital Partners, L.P., a Delaware limited
partnership ("St. Cloud"), as "Lead Lender" and "Collateral Agent" and (iii) St.
Cloud, Donald Tucker, Brian Miller, and any other person signing the signature
page of the Securities Purchase Agreement as an Investor or that becomes an
Investor after March 22, 2005, (collectively, the "Investors"). Pursuant to the
Securities Purchase Agreement, Viking will sell promissory notes ("Notes") to
Investors in the maximum aggregate amount of $2,750,000. As of March 22, 2004,
Investors have purchased Notes in the aggregate amount of $1,550,000. While
there can be no assurances that Viking will raise the full amount, as of March
22, 2005 Viking had commitments from Investors to purchase the balance of
$1,200,000 of the Notes by March 31, 2005. The material terms of the Securities
Purchase Agreement and other Transaction Documents include, but are not limited
to, the following:
Maturity Date of Notes Twelve Months from the date of issuance
Interest Rate of Notes Ten percent per annum
Security The Notes are secured by all of the assets of Viking.
Optional Conversion The Notes may, at the option of the Investors, be
converted into shares of Viking common stock at the
price of $.20 per share. The conversion price is
subject to downward adjustment, upon certain
conditions pursuant to the terms of Security Purchase
Agreement and other Transaction Documents.
Mandatory Conversion Viking shall have the right to require an Investor to
convert all or a portion of such Investor's Note at
the conversion price in the event that: (i) no Event
of Default exists or is continuing at the time of such
mandatory conversion; and (ii)Viking has raised a
minimum of $3,000,000 in public and/or private equity
offerings on or prior to the one- year anniversary
date of the initial closing at an average price equal
to or greater than $0.30 per share of common stock.
Warrants As additional consideration for the Investors
purchasing the Notes, Viking has issued the Investors
Warrants to purchase shares of Viking common stock at
the price of $.40 per share. The exercise price is
subject to downward adjustment, upon certain
conditions pursuant to the terms of Security Purchase
Agreement and other Transaction Documents. The
Warrants are exercisable for a period of 42 months
from the date of issuance.
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Registration Rights Viking has agreed to register with the Securities and
Exchange Commission and applicable state securities
agencies, the shares of common stock that are issuable
upon the conversion of the Notes and the shares of
common stock that underlie the Warrants.
The initial Investors include: St. Cloud Capital Partners L.P. $750,000
Donald Tucker $500,000 *
Brian Miller $300,000 *
* Donald Tucker and Brian Miller had previously loaned $500,000 and
$300,000 respectively to Viking. Such loans were payable in full March 31,
2005. Each of these loans was converted into Notes pursuant to the
Securities Purchase Agreement. Accordingly, additional cash was not
received by Viking for these amounts.
Pursuant to the Securities Purchase Agreement, Marshall Geller was
appointed as a director of Viking and Larry Haimovitch was appointed as an
Observer to the Viking Board of Directors. Mr. Geller and Mr. Haimovitch are
affiliates of St. Cloud Capital Partners, LP, one of the Investors. St. Cloud
Capital Partners, L.P. was also designated as the Lead Lender and Collateral
Agent under the Securities Purchase Agreement and related transaction documents.
The Securities Purchase Agreement contains various representations and
warranties that are relatively standard for this type of transaction as well as
certain affirmative and negative covenants.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 in this Current Report on Form 8-K
is hereby incorporated by reference.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers
Pursuant to the Securities Purchase Agreement described in Item 1.01 in
this Current Report on Form 8-K, effective March 22, 2005, Marshall Geller was
appointed as a member of Viking's Board of Directors. Marshall is an affiliate
of St. Cloud Capital Partners, L.P. which is an Investor, the Lead Lender and
the Collateral Agent under the Securities Purchase Agreement and other
Transaction Documents. Mr. Geller has not yet been appointed to any committee of
the Board of Directors.
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Item 9.01 Financial Statements and Exhibits
C - Exhibits
Exhibit Number Description
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10.1 Securities Purchase Agreement *
10.2 Form Convertible Promissory Note *
10.3 Form Warrant *
10.4 Registration Rights Agreement *
10.5 Security Agreement *
* Previously filed with original Form 8-K
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Dated: March 29, 2005 VIKING SYSTEMS, INC.
By: /s/ Thomas B. Marsh,
President/Chairman of the Board
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