UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
January 3, 2006
Date of Report (Date of earliest event reported)
VIEW SYSTEMS, INC.
(Name of small business issuer in its charter)
Nevada 000-30178 59-2928366
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(State of incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
1550 Caton Center Drive, Suite E, Baltimore, Maryland 21227
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(Address of principal executive offices) (Zip code)
Registrant's telephone number: (410) 242-8439
[ ] 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))
Section 3 - Financial Information
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under
an Off-balance Sheet Arrangement
View Systems, Inc. entered into a Subscription Agreement, dated December 23,
2005, with three accredited investors; Starr Consulting, Inc., Active
Stealth, LLC, and KCS Referral Service LLC (the "Subscribers"). We agreed to
sale and the Subscribers agreed to purchase convertible promissory notes and
warrants. The Subscribers agreed to purchase up to an aggregate of $500,000
of 8% promissory notes convertible into shares of our common stock at a per
share conversion price of $0.10. The notes are due and payable by December
31, 2006. The Subscribers agreed to purchase the promissory notes over a 5
month period in $100,000 per month installments. On January 3, 2006, we
closed the first $100,000 installment.
Pursuant to the agreement, for each purchase of a promissory note the
Subscribers receive one warrant to purchase one share of our common stock that
would be issued if the aggregate amount of the promissory note were purchased
and converted based on the conversion price. The exercise price of each
warrant will be equal to 130% of the closing bid price as quoted by any market
maker for our common stock on the OTC Bulletin Board on the day immediately
preceding the date of exercise. The warrants expire on December 31, 2006.
Starr Consulting, Inc. agreed to purchase convertible promissory notes in the
aggregate amount of $166,667, which may be converted into 1,666,667 shares of
our common stock, and the Subscriber may receive warrants to purchase
1,666,667 common shares. Active Stealth, LLC and KCS Referral Service LLC
each agreed to purchase convertible promissory notes in the aggregate amount
of $166,666, convertible into 1,666,666 common shares, and each Subscriber may
receive warrants to purchase an additional 1,666,666 common shares.
The agreement provides for piggy back registration rights for the shares
underlying the convertible promissory notes and warrants. We must file a
registration statement within 60 days of a request by any Subscriber and cause
the registration statement to become effective within 120 days of that
request. We are obligated to maintain the effectiveness of the registration
statement until all the underlying shares have been sold by the Subscribers.
If we fail to obtain or maintain effectiveness of the registration statement,
then we are required to pay liquidated damages in an amount equal to 2% of the
purchase price of the convertible promissory notes remaining unconverted and
the purchase price of the shares issued upon conversion of the notes owned of
record by the holder of the notes for each 30 day period that the registration
statement is not effective.
If we fail to issue shares within 10 business days after a request by a
Subscriber, then the Subscriber in entitled to a sum of money, whichever is
greater of either (i) multiplying the outstanding principal amount of the note
designated by the Subscriber by 130%, or (ii) multiplying the number of shares
deliverable upon conversion of the amount of the note's principal and/or
interest at the conversion price that would be in effect on the deemed
conversion date by the highest closing price of the common stock on the
principal market for the period commencing on the deemed conversion date until
the day prior to the receipt of the payment.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits
Exhibits
No. Description
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4.1 Subscription Agreement between View Systems, Inc. and Starr Consulting,
Inc., Active Stealth, LLC, and KCS Referral Service LLC, dated December
23, 2005
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
VIEW SYSTEMS, INC.
/s/ Gunther Than
Date: January 5, 2006 By: _____________________________________
Gunther Than
President, Chief Executive Officer,
Treasurer and Director
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