UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549


                                   FORM 8-K/A

                                 AMENDMENT NO. 2


                                 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 30, 2005


                              PATRON SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)


           DELAWARE                      000-25675              74-3055158
 (State or other jurisdiction    (Commission File Number)    (I.R.S. Employer
       of incorporation)                                    Identification No.)


                      500 NORTH MICHIGAN AVENUE, SUITE 300
                             CHICAGO, ILLINOIS 60611
                (Address of Principal Executive Offices/Zip Code)


                                 (312) 396-4031
              (Registrant's telephone number, including area code)

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 ct (17 CFR 240.14d-2(B))

     [ ]  Pre-commencement communications pursuant to Rule 13e-4(c)) under the
          Exchange Act (17 CFR 240.13e-4c))



This Current Report on Form 8-K/A amends Item 9.01 of the Current Report on Form
8-K filed with the Securities and Exchange Commission ("SEC") by Patron Systems,
Inc.  ("Patron")  on  April  5,  2005  (the "Form 8-K"), reporting the merger of
Patron  Systems,  Inc.  with Entelagent Software Corp. ("Entelagent").  The Form
8-K is hereby amended to insert those items as set forth herein.


ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS.

     (a)     Financial Statements of business acquired.



INDEX OF FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  PAGE
                                                                                          
COMPLETE SECURITY SOLUTIONS, INC.

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . .    3
Balance Sheet at December 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    5
Statement of Operations for the Period from July 28, 2004 (Inception) to
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
Statement of Stockholders' Equity for the Period from July 28, 2004 (Inception) to
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8
Statement of Cash Flows for the Period from July 28, 2004 (Inception) to
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9
Notes to Consolidated Financial Statements for the Period from July 28, 2004 (Inception) to
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

IDK ENTERPRISES, INC.

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . .   21
Balance Sheet at December 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
Statement of Operations for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
Statement of Stockholders' Deficiency for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
Statement of Cash Flows for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   28
Notes to Consolidated Financial Statements for the Year Ended
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30

LUCIDLINE, INC.

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . .   42
Balance Sheet at December 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   43
Statement of Operations for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   45
Statement of Stockholders' Deficiency for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   46
Statement of Cash Flows for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   47
Notes to Consolidated Financial Statements for the Year Ended
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   49

ENTELAGENT SOFTWARE CORP.

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . .   58
Balance Sheet at December 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   59
Statement of Operations for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   61
Statement of Shareholders' Deficiency for the Years Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   62
Statement of Cash Flows for the Year Ended
    December 31, 2004 and 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   63
Notes to Consolidated Financial Statements for the Year Ended
    December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   65




             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders
Complete Security Solutions, Inc.


We have audited the accompanying  balance sheet of Complete Security  Solutions,
Inc.  as of  December  31,  2004  and  the  related  statements  of  operations,
stockholders'  equity  and  cash  flows  for  the  period  from  July  28,  2004
(inception)  to  December  31,  2004.   These   financial   statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant estimates made by the management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion,  the financial  statements referred above present fairly, in all
material respects,  the financial position of Complete Security Solutions,  Inc.
as of December 31, 2004 and the results of its operations and its cash flows for
the period from July 28, 2004  (inception)  to December 31, 2004,  in conformity
with accounting principles generally accepted in the United States of America.


                                        3



The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial  statements,  the Company  incurred a loss during its inception period
and has limited capital  resources.  These  conditions raise  substantial  doubt
about its ability to continue as going  concern.  Management's  plans  regarding
those  matters also are  described in Note 2. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.


/s/ Marcum & Kliegman LLP
-------------------------
Marcum & Kliegman LLP

October 7, 2005
New York, New York


                                        4



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------


                             ASSETS

CURRENT ASSETS
  Cash ......................................................         $1,447,885
  Prepaid expenses and other current assets .................             96,700
                                                                      ----------

    Total Current Assets ....................................         $1,544,585

OTHER ASSETS
  Deferred financing costs, net .............................             85,167
  Advances to prospective acquirer ..........................            722,000
  Advances to prospective acquiree ..........................            657,847
  Advances to prospective affiliates ........................          1,375,969
                                                                      ----------

    Total Other Assets ......................................          2,840,983
                                                                      ----------

    TOTAL ASSETS ............................................         $4,385,568
                                                                      ==========


                                        5



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------

              LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accrued expenses ............................................     $    43,750
  Advances from stockholder ...................................         100,000
  Dividends payable ...........................................          34,539
                                                                    -----------

    Total Current Liabilities .................................     $   178,289

SERIES A MANDATORILY REDEEMABLE
  CONVERTIBLE PREFERRED STOCK (Liquidation
  preference $9,039,469) ......................................       3,877,219
                                                                    -----------

TOTAL LIABILITIES .............................................       4,055,508

STOCKHOLDERS' EQUITY
  Common stock, par value $.01; 40,000,000 shares
    authorized; 2,453,160 shares issued and outstanding .......          24,532
  Stock subscription receivable ...............................         (24,532)
  Additional paid in capital ..................................         673,643
  Deficit accumulated during the development stage ............        (343,583)
                                                                    -----------

    TOTAL STOCKHOLDERS' EQUITY ................................         330,060
                                                                    -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ................     $ 4,385,568
                                                                    ===========


                                        6



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                                         STATEMENT OF OPERATIONS

              For the Period from July 28, 2004 (Inception) to December 31, 2004
--------------------------------------------------------------------------------


OPERATING EXPENSES
  Employee compensation and benefits .......................          $  84,513
  Legal and professional fees ..............................             17,822
  Consulting fees ..........................................             55,000
  General and administrative expenses ......................            121,927
                                                                      ---------

    TOTAL OPERATING EXPENSES ...............................          $ 279,262
                                                                      ---------

    OPERATING LOSS .........................................           (279,262)

OTHER INCOME (EXPENSE)
  Interest expense .........................................            (85,450)
  Interest income - related parties ........................             21,129
                                                                      ---------

    TOTAL OTHER EXPENSE ....................................            (64,321)
                                                                      ---------

    LOSS BEFORE  INCOME TAXES ..............................           (343,583)

INCOME TAXES ...............................................               --   
                                                                      ---------

    NET LOSS ...............................................          $(343,583)
                                                                      =========


                                        7



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                               STATEMENT OF STOCKHOLDERS' EQUITY

              For the Period from July 28, 2004 (Inception) to December 31, 2004
--------------------------------------------------------------------------------




                                                                                             Deficit
                                                                                           Accumulated
                                                                     Stock      Additional  During the
                                                Common Stock      Subscription   Paid in   Development
                                             Shares      Amount    Receivable    Capital      Stage        Total
                                           ---------   ---------   ---------    ---------   ---------    ---------
                                                                                             
BALANCE - July 28, 2004 ................        --     $    --     $    --      $    --     $    --      $    --


Common stock issued in exchange for
  subscriptions receivable .............   2,453,160      24,532     (24,532)        --          --           --
Warrants issued to investors of Series A
Preferred stock ........................        --          --          --        635,843        --        635,843
Warrants issued to Placement Agent .....        --          --          --         37,800        --         37,800
Net loss ...............................        --          --          --           --      (343,583)    (343,583)
                                           ---------   ---------   ---------    ---------   ---------    ---------


BALANCE - December 31, 2004 ............   2,453,160   $  24,532   $ (24,532)   $ 673,643   $(343,583)   $ 330,060
                                           =========   =========   =========    =========   =========    =========



                                        8



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                                         STATEMENT OF CASH FLOWS

              For the Period from July 28, 2004 (Inception) to December 31, 2004
--------------------------------------------------------------------------------


CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss ....................................................     $  (343,583)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Interest income ...........................................     $   (21,129)
    Non-cash interest expense .................................          11,980
  Changes in operating assets and liabilities:
    Prepaid expenses and other current assets .................         (96,700)
    Accrued consulting fee ....................................          10,000
    Accrued dividends .........................................          34,539
    Accrued interest ..........................................          38,931
                                                                    -----------

    TOTAL ADJUSTMENTS .........................................         (22,379)
                                                                    -----------

    NET CASH USED IN OPERATING ACTIVITIES .....................        (365,962)
                                                                    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Advances to prospective acquirer ............................        (722,000)
  Advances to prospective acquiree ............................        (657,847)
  Advances to prospective affiliates ..........................      (1,354,840)
                                                                    -----------

    NET CASH USED IN INVESTING ACTIVITIES .....................      (2,734,687)
                                                                    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Gross proceeds from issuance of Series A
    Mandatorily Redeemable Convertible Preferred Stock ........       4,463,534
  Deferred financing costs ....................................         (15,000)
  Advances from stockholder ...................................         100,000
                                                                    -----------

    NET CASH PROVIDED BY FINANCING ACTIVITIES .................     $ 4,548,534
                                                                    -----------


                                        9



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                                              STATEMENT OF CASH FLOWS, Continued

              For the Period from July 28, 2004 (Inception) to December 31, 2004
--------------------------------------------------------------------------------


    NET INCREASE IN CASH ..........................................   $1,447,885

CASH - July 28, 2004 (Inception) ..................................         --  
                                                                      ----------

CASH - December 31, 2004 ..........................................   $1,447,885
                                                                      ----------


SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES
  Settlement of accrued interest by issuing Series A
    Mandatorily Redeemable Convertible Preferred Stock ............   $   38,931
  Common stock issued in exchange for subscription receivable .....   $   24,532
  Accrued placement agent fee recorded as a deferred financing cost   $   33,750


                                       10



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - THE COMPANY

       ORGANIZATION
       Complete   Security   Solutions,   Inc.  (the   "Company"),   a  Delaware
       corporation,  was formed on July 28, 2004 with a business plan of raising
       capital and consummating  business  combinations  with certain  companies
       developing  technologies for use in the information and homeland security
       markets. As described in Note 14, the Company completed a merger with IDK
       Enterprises, Inc. ("IDK") on February 24, 2005 and was acquired by Patron
       Systems,  Inc.  ("Patron") pursuant to an agreement and plan of merger on
       February 25, 2005.


NOTE 2 - LIQUIDITY AND FINANCIAL CONDITION

       The accompanying  financial  statements have been prepared  assuming that
       the Company will continue as a going concern.  The Company incurred a net
       loss of  $343,583  for the  period  from  July 28,  2004  (inception)  to
       December 31, 2004.  The  Company's  working  capital at December 31, 2004
       amounts to $1,366,296. As described in Note 14, the Company consummated a
       merger  with IDK,  and was  subsequently  merged  with and into Patron on
       February 25, 2005. Patron has limited capital resources and is subject to
       substantial  legal  contingencies  that raise  doubt as to its ability to
       continue  as a  going  concern.  The  Company  will  require  substantial
       additional  working  capital  to  sustain  its  operations  while  Patron
       attempts to integrate the business into its existing operations.

       The Company  expects to  continue  incurring  losses for the  foreseeable
       future and cannot  provide any  assurance  as to when,  if ever,  it will
       become a profitable  enterprise due to the inherent  uncertainty  that is
       related to  establishing  the  commercial  feasibility  of  technological
       products and  developing a presence in new markets.  These  matters raise
       substantial  doubt about its ability to continue as a going concern.  The
       Company's  continued existence is dependent upon the ability of Patron to
       raise the  additional  capital  that it needs to sustain  its  operations
       while it  continues  to execute its  business  plan and resolve its legal
       contingencies in a manner that will not have a material adverse affect on
       the Company.

       Patron is  currently  in the process of  attempting  to raise  additional
       capital  and its  management  has taken  certain  steps to  conserve  its
       liquidity  while it continues to integrate the Company and other acquired
       businesses into its existing  operations.  Neither Patron nor the Company
       has obtained any  commitment  to provide the Company with new  financing.
       These matters  raise  substantial  doubt about the  Company's  ability to
       continue as a going concern.  The financial statements do not include any
       adjustments relating to the recoverability of recorded asset amounts that
       might be necessary as a result of the above uncertainty.


                                       11



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       DEVELOPMENT STAGE OPERATIONS
       In accordance with Statement of Financial  Accounting  Standard  ("SFAS")
       No.7, the Company is considered to be a development  stage  enterprise as
       its  activities  principally  consist of raising  capital  and  screening
       potential acquisition candidates in the information and homeland security
       segments.

       INCOME TAXES
       The Company  accounts  for income  taxes  under  Statement  of  Financial
       Accounting  Standards No. 109,  "Accounting  for Income Taxes" ("SFAS No.
       109").  SFAS No. 109 requires the  recognition of deferred tax assets and
       liabilities  for both the  expected  impact of  differences  between  the
       financial  statements and tax basis of assets and liabilities and for the
       expected  future tax  benefit to be derived  from tax loss and tax credit
       carry forwards. SFAS No. 109 additionally requires the establishment of a
       valuation  allowance to reflect the likelihood of realization of deferred
       tax assets.

       FAIR VALUE OF FINANCIAL INSTRUMENTS
       The carrying amounts reported in the balance sheet for cash,  advances to
       prospective acquirer, acquiree and affiliates,  accounts payable, accrued
       expenses,  and advances from  stockholders  approximate their fair values
       based on the  short-term  maturity  of these  instruments.  The  carrying
       amounts of the  Company's  Series A  Mandatorily  Redeemable  Convertible
       Preferred Stock ("Series A Preferred")  approximates  fair value as these
       securities  feature  contractual  dividend rates that are consistent with
       current  market  rates of  return  and have an  effective  yield  that is
       consistent with instruments of similar risk, when taken together with any
       equity instruments concurrently issued to the investors of these shares.

       USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
       In  preparing   financial   statements  in  conformity   with  accounting
       principles generally accepted in the United States of America, management
       is required to make  estimates and  assumptions  that affect the reported
       amounts of assets and liabilities and the disclosure of contingent assets
       and  liabilities at the date of the financial  statements and revenue and
       expenses  during the reporting  period.  Actual results could differ from
       those estimates.


NOTE 4 - CONCENTRATION OF CREDIT RISK

       The Company maintains a cash account at a financial  institution  insured
       by  the  Federal  Deposit  Insurance  Corporation  ("FDIC").   Management
       monitors the  soundness of this  institution  and considers the Company's
       risk to be  minimal.  The  amount of credit  risk over the FDIC  limit at
       December 31, 2004 amounts to $1,347,885.


                                       12



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 5 - DEFERRED FINANCING COSTS

       Deferred  financing  costs  include  an  aggregate  of  $48,750  of  cash
       transaction  fees  incurred  in  connection  with the Series A  Preferred
       financing transaction described in Note 10. Such fees include (a) $33,750
       representing a .75%  transaction  fee to be paid to the placement  agent,
       and (b) $15,000 representing a 6% origination fee paid to an investor. In
       addition, the Company issued 45,000 common stock purchase warrants with a
       fair value of $37,800 to the placement  agent.  A summary of the deferred
       financing costs and accumulated amortization is as follows:

                                                                 Amount
                                                                --------
       Fees paid and to be paid in cash ..................      $ 48,750
       Placement agent warrants ..........................        37,800
                                                                --------
                                                                  86,550
       Less:  accumulated amortization ...................        (1,383)
                                                                --------

                 Deferred Financing Costs, Net ...........      $ 85,167
                                                                ========

       These deferred  financing  costs are being amortized over the term of the
       Series A Preferred to its earliest mandatory  redemption date of November
       22, 2009.  Amortization  expense with respect to deferred financing costs
       amounted  to  $1,383  for the  period  of July 28,  2004  (inception)  to
       December 31, 2004 and is included as a component  of interest  expense in
       the accompanying statement of operations.


NOTE 6 - ADVANCES TO PROSPECTIVE ACQUIRER

       In 2004,  the Company  made an  aggregate  of  $722,000  of  non-interest
       bearing cash advances to Patron for working capital purposes. The amounts
       are due on demand.  Subsequent to December 31, 2004,  the Company  merged
       into Patron in a purchase business combination, at which time the Company
       became a  wholly-owned  subsidiary  of  Patron  (Note  14).  The  Company
       classified  these  advances  as  non-current  assets in the  accompanying
       balance sheet as a result of the business combination with Patron.


NOTE 7 - ADVANCES TO PROSPECTIVE ACQUIREE

       In 2004,  the Company  made an  aggregate  of  $657,847  in  non-interest
       bearing cash advances to IDK for working  capital  purposes.  The amounts
       are due on demand.  The Company  classified these advances as non-current
       assets in the  accompanying  balance  sheet as a result  of the  business
       combination with Patron (Note 14).


                                       13



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 8 - ADVANCES TO PROSPECTIVE AFFILIATES

       Advances to prospective affiliates are as follows:

                                                                 Amount
                                                               ----------
       LucidLine, Inc. ..............................          $  587,700
       Entelagent Software Corp. ....................             788,269
                                                               ----------

                                                               $1,375,969

       In 2004,  the  Company  made an  aggregate  of $577,000  and  $777,840 in
       advances to each of LucidLine, Inc. ("LucidLine") and Entelagent Software
       Corp.  ("Entelagent"),  respectively  for working capital  purposes.  The
       advances  bear  interest  at 10% per  annum  and are  secured  by all the
       current and future assets of each of the  companies.  Interest  income on
       these  loans  amounted  to  $21,129  for  the  period  of July  28,  2004
       (inception)  to December 31, 2004,  including  $10,700 due from LucidLine
       and  $10,429  due from  Entelagent.  Subsequent  to  December  31,  2004,
       LucidLine  and  Entelagent  were  acquired  by Patron at which  time they
       became  affiliates of the Company through common ownership (Note 14). The
       Company   classified   these  advances  as  non-current   assets  in  the
       accompanying  balance sheet as a result of the business  combination with
       Patron.


NOTE 9 - ADVANCES FROM STOCKHOLDER

       Advances from  stockholder  represent excess advances made to the Company
       by Apex Venture  Partners  ("Apex") in connection  with its investment in
       Series A  Preferred.  The  Company  repaid this amount to Apex in January
       2005.


NOTE 10 - SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

       Pursuant to the Company's  restated  certificate  of  incorporation,  the
       Company is authorized  to issue up to  10,000,000  shares of its Series A
       Preferred, $0.01 par value.

       In  December  2004,  the  Company  issued  4,502,465  shares  of Series A
       Preferred  in  exchange  for  $4,463,534  of cash and the  settlement  of
       $38,931  of  accrued   interest  on  advances  made  to  the  Company  by
       stockholders.  In  addition,  the  Company  issued to  certain  investors
       holding  $1,750,000 of such preferred shares,  warrants to purchase up to
       462,500 shares of the Company's common stock  ("Warrants").  The warrants
       have a  seven-year  term and an  exercise  price of $1.00 per share.  The
       aggregate fair value of the warrants amounts to $635,843.


                                       14



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK, continued

       In  accordance  with APB 14,  the  Company  allocated  $3,866,622  of the
       proceeds  to the Series A  Preferred  and  $635,843  of  proceeds  to the
       warrants.  The  difference  between the  carrying  amount of the Series A
       Preferred and their contractual  redemption is being accreted as interest
       expense to  November 9, 2009,  the  earliest  redemption  of the Series A
       Preferred.  Accretion of the aforementioned  discount amounted to $10,597
       for the period from July 28, 2004 (inception) to December 31, 2004 and is
       included as a component of interest expense in the accompanying statement
       of operations.

       The Series A Preferred  is  convertible  into common stock at any time at
       the option of the holder based on a formula that  currently  results in a
       one-for-one  exchange  ratio of common  for  preferred.  This  formula is
       subject   to   adjustment    for   stock   splits,    stock    dividends,
       recapitalizations,  and other  anti-dilution  provisions.  The  shares of
       redeemable  convertible preferred stock convert automatically into shares
       of common stock  immediately  upon the  effectiveness  of a  registration
       statement  under the  Securities  Act of 1933 with an offering  price per
       share of at least five times the  original  issue price of the  Preferred
       Stock  and  which  results  in  aggregate   cash  proceeds  of  at  least
       $25,000,000.

       The  Company  has  reserved  4,964,965  shares  of its  common  stock for
       issuance upon the  conversion  of its  redeemable  convertible  preferred
       stock and the exercise of the related common stock purchase warrants.

       The  Series  A  Preferred  also  features  (1) a  liquidation  preference
       entitling the holders of Series A Preferred to be paid an amount equal to
       twice the original  purchase price per share, plus any accrued but unpaid
       dividends,   upon  a  liquidation  event  as  defined,   (2)  cumulative,
       preferential  dividends of $0.10 per share per annum,  and (3) a right to
       participate   in   dividends   on  a  pro  rata  basis  with  the  common
       stockholders,  based  upon the  number of common  shares  into  which the
       Series A Preferred are convertible,  if and when declared by the Board of
       Directors.  Dividends  accrued but not paid do not bear interest and upon
       conversion into common stock, any unpaid  dividends are not payable.  The
       holders  of the  Series A  Preferred,  voting  together  as a class,  are
       entitled to elect two members of the Board of Directors.

       In the event funds are sufficient to make a complete  distribution to the
       holders of Preferred Stock as described  above, the remaining assets will
       be distributed ratably to the holders of common stock and Preferred Stock
       on an as-converted to common stock basis.

       Holders  of at  least  sixty  six and two  thirds  percent  (66  2/3%) in
       interest  of the Series A  Preferred  can require the Company at any time
       after November 22, 2009 to redeem their Series A Preferred  shares at the
       original issue price per share ($1.00 per share), plus accrued but unpaid
       dividends.  Redemption payments,  if demanded,  would be payable in three
       equal  annual  installments  of 33 1/3%  each  beginning  within  60 days
       following the Company's  receipt of a redemption notice by the holders of
       at least 66 2/3% interest in the Series A Preferred.


                                       15



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 10 - SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK, continued

       The Company  accounted  for the issuance of its Series A Preferred,  with
       common  stock  purchase   warrants,   in  accordance   with  EITF  00-27,
       "Convertible   Securities   with  Beneficial   Conversion   Features  and
       Contingently  Adjustable Conversion Rations".  Accordingly,  the Series A
       Preferred  is  presented  in the  accompanying  balance  sheet net of the
       unamortized  portion of $635,843 of aggregate  discounts  resulting from:
       (i) an  allocation of the proceeds to the  respective  fair values of the
       Series A Preferred and common stock purchase  warrants and (2) beneficial
       conversion  features based on the  "effective"  conversion  prices of the
       Series A Preferred.  The  unamortized  portion of the aggregate  discount
       amounts to $625,246 at December 31, 2004.

       The Series A Preferred stock discount is being amortized over the term of
       such shares to their  earliest  date of  redemption of November 22, 2009.
       The  accretion  of the Series A  Preferred  to its  mandatory  redemption
       amount  and  contractual  dividends  are  included  in  the  accompanying
       financial  statements as a component of interest  expense.  The following
       table  presents  a summary of the Series A  Preferred  stock  contractual
       dividends and accretion of the discount:

                                                            For the Period from
                                                               July 28, 2004
                                                              (Inception) to
                                                                December 31,
                                                                    2004
                                                            -------------------
       Contractual dividends at $0.10 per annum .........         $34,539

       Accretion of Series A Preferred to its mandatory
         redemption amount ..............................          10,597
                                                                  -------

                                                                  $45,136

       Total  non-cash  interest  expense,  which  amounts to $11,980,  includes
       $10,597  of  accretion  described  above plus  amortization  of $1,383 of
       deferred financing costs (see Note 5).

       The  Company  classified  the Series A Preferred  as a  liability  in the
       accompanying  balance sheet in accordance with SFAS 150,  "Accounting for
       Certain Financial  Instruments with  Characteristics  of both Liabilities
       and  Equity,"  since it is  mandatorily  redeemable  at the option of the
       holders.

       The  Company  concurrently  entered  into an Investor  Rights  Agreement,
       Stockholders' Agreement and Right of First Refusal and Co-sale Agreement,
       each of which provides for certain rights and  restrictions  with respect
       to the Series A Preferred investors that are more fully described in Note
       11.


                                       16



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11 - STOCKHOLDERS' EQUITY

       COMMON STOCK
       On November 11, 2004,  the Company  issued  953,160  shares of its common
       stock to its founders,  who are principally employees of IDK Enterprises,
       Inc. in exchange for  subscriptions  receivable  in the amount of $9,532.
       The subscriptions were paid in February 2005.

       On December 31, 2004, the Company issued  1,500,000  shares of its common
       stock in exchange for  subscriptions  receivable in the amount of $15,000
       to 3 members of Patron's advisory board.

       ISSUANCE OF COMMON STOCK PURCHASE WARRANTS
       On December 3, 2004,  the Company  issued  45,000  common stock  purchase
       warrants with a term of 7 years and an exercise  price of $1.00 per share
       to the Placement  Agent in the Series A Preferred  financing  transaction
       (Note 10). The aggregate fair value of these warrants amounted to $37,800
       and was accounted for as deferred financing costs.

       On December 3, 2004,  the Company  issued  462,500  common stock purchase
       warrants with a term of 7 years and an exercise  price of $1.00 per share
       to the Series A Preferred  investors  (Note 10). The aggregate fair value
       of these warrants amounted to $635,843.

       STOCKHOLDERS' AGREEMENT
       On  December  2,  2004,  the  Company  entered  into  an  agreement  (the
       "Stockholders'   Agreement")  with  its  common   stockholders   ("Common
       Stockholders") and the investors of its Series A Preferred ("Investors"),
       with the Common Stockholders and Investors,  collectively  referred to as
       (the "Holders").

       The  Stockholders'  Agreement  provides for, among other things,  (a) the
       Common  Stockholders,  voting as a class, to designate two members to the
       Company's board of directors,  (b) the Investors to designate two members
       to the  Company's  board of  directors,  including one to be appointed by
       Apex Investment  Fund V, LP (a significant  investor) and the other to be
       elected  by a  majority  of the  Investors  voting  as a  class,  (c) the
       Holders, to collectively elect, by a majority vote, a fifth member to the
       Company's board of directors, (d) certain restrictions on the transfer of
       shares,  and (e) a majority of the Investors (on an as converted basis to
       common stock) to exercise  certain "Drag Along" rights,  as defined,  and
       for the Holders to exercise certain "Tag Along" rights, as defined in the
       event  of  a  proposed  sale  of  a  majority  of  shares  under  certain
       circumstances.


                                       17



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11 - STOCKHOLDERS' EQUITY, continued

       INVESTOR RIGHTS AGREEMENT
       On  December  2,  2004,  the  Company  entered  into an  Investor  Rights
       Agreement (the "Investor Rights Agreement") with its Common  Stockholders
       and Investors and, on a collective basis with the Holders, providing for,
       among other things,  the Company to (a) reserve up to 3,500,000 shares of
       its common stock for issuance  under various types of employee,  director
       and consultant stock compensation arrangements,  if and when the board of
       directors may approve such plans,  and (b) register  under the Securities
       Act certain  shares of  restricted  stock for  resale,  if required by at
       least 40% of the holders of such shares (the "Registration Rights").

       Pursuant to the Investor Rights Agreement,  such Registration  Rights are
       exercisable at any time after the earlier of three years from the date of
       the  issuance  of the  Series  A  Preferred,  or  six  months  after  the
       completion  of an initial  public  offering by holders,  representing  at
       least a 40% interest of all restricted  shares.  Such holders may request
       the Company to register no less than 20% of their restricted  shares,  or
       such lesser  percentage if in the event the  anticipated  offering  price
       under such registration is in excess of $5,000,000.

       RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT
       On December 2, 2004,  the Company  entered into a Right of First  Refusal
       and  Co-sale  Agreement  with  its  Common  Stockholders  and  Investors,
       providing,  among  other  things,  for the  Company or the  Investors  to
       exercise a "Right of First Refusal" or "Co-sale  Rights," as defined,  to
       purchase shares of common stock in the event any such shares are proposed
       to be sold by any significant Common Stockholder.


NOTE 12 - CONSULTING SERVICES

       The  Company incurred $55,000 of consulting fees for executive management
       and  corporate  advisory  services  provided  by a number of its board of
       directors during the period of July 2004 through December 2004.


NOTE 13 - INCOME TAXES

       As of December  31,  2004,  the Company has  incurred  book losses  since
       inception  of  $343,583  and  estimates  that it has net  operating  loss
       carryforwards  available to offset future taxable income of approximately
       $340,000 that may be available to offset future  taxable  income,  if any
       through 2024. The Company has established a 100% valuation  allowance for
       the deferred tax assets  arising  from the net  operating  loss and other
       temporary  differences as management believes that it is more likely than
       not that their benefit, if any, will not be realized in the future.


                                       18



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 13 - INCOME TAXES, continued

       The utilization of the net operating losses may be subject to substantial
       limitations due to the "change of ownership" provisions under Section 382
       of the Internal Revenue Code and similar state provisions, as a result of
       the Company's merger with Patron on February 25, 2005 (Note 14).

       The Company paid no income taxes during the year ended December 31, 2004.


NOTE 14 - SUBSEQUENT EVENTS

       MERGER OF IDK ENTERPRISES, INC. INTO THE COMPANY
       On  February  24,  2005,  the  Company  merged  with IDK  pursuant  to an
       Agreement and Plan of Merger, by and between the Company, IDK Acquisition
       Sub, LLC, IDK, and George M. Middlemas, as Shareholder  Representative of
       IDK, with IDK Acquisition Sub, LLC surviving as a wholly-owned subsidiary
       of  the  Company.   In  connection  with  the  merger,  all  the  issued,
       outstanding and  held-in-treasury  common and preferred stock of IDK were
       cancelled and retired.  The Shareholders of IDK received 8,046,840 shares
       of the Company's common stock.

       MERGER OF THE COMPANY INTO PATRON SYSTEMS, INC.
       On February 25, 2005,  pursuant to the filing of an Agreement and Plan of
       Merger,  the  merger  by and  between  Patron  with  the  Company  became
       effective.   The  merger  was   consummated   pursuant  to  a  definitive
       Supplemental Agreement and the Agreement and Plan of Merger, entered into
       as of February 24, 2005, each among Patron, CSSI Acquisition Co. I. Inc.,
       a  wholly-owned  subsidiary  of Patron and the  Company.  Pursuant to the
       terms of the Supplemental Agreement and Agreement and Plan of Merger with
       the Company, CSSI Acquisition Co., Inc. merged with and into the Company,
       with the Company  surviving  the merger as a  wholly-owned  subsidiary of
       Patron. In connection with the Company's merger,  Patron issued 7,500,000
       shares of common  stock in  exchange  for the  outstanding  shares of the
       Company's  common  stock,  and  subordinated   promissory  notes  in  the
       aggregate  principal  amount  of  $4,500,000  and  warrants  to  purchase
       2,250,000  shares of common stock in exchange for the outstanding  shares
       of the Company's preferred stock. The warrants have a term of 5 years and
       an exercise price of $0.70 per share. The  subordinated  promissory notes
       and  warrants  were  issued  to  Apex   Investment   Fund  V,  L.P.,  The
       Northwestern Mutual Life Insurance Company, and Advanced Equities Venture
       Partners I, L.P.

       MERGER OF LUCIDLINE, INC. INTO PATRON SYSTEMS, INC.
       On February 25, 2005,  pursuant to the filing of an Agreement and Plan of
       Merger, Patron's merger with LucidLine became effective.


                                       19



                                               COMPLETE SECURITY SOLUTIONS, INC.
                                                (A Development Stage Enterprise)

                              NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 14 - SUBSEQUENT EVENTS, continued

       MERGER OF ENTELAGENT SOFTWARE CORP. INTO PATRON SYSTEMS, INC.
       On March 30,  2005,  pursuant  to the filing of an Amended  and  Restated
       Agreement  and Plan of Merger,  Patron's  merger with  Entelagent  became
       effective. The Amended and Restated Agreement and Plan of Merger received
       a filing date of April 28, 2005 from the  Secretary of State of the State
       of California.


                                       20

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders
IDK Enterprises, Inc.


We have audited the accompanying  balance sheet of IDK  Enterprises,  Inc. as of
December 31, 2004 and the related statements of operations, stockholders' equity
(deficiency)  and cash flows for the years  ended  December  31,  2004 and 2003.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audits included consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant estimates made by the management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements referred above present fairly, in all
material  respects,  the  financial  position  of IDK  Enterprises,  Inc.  as of
December 31, 2004 and the results of its  operations  and its cash flows for the
years ended December 31, 2004 and 2003, in conformity with accounting principles
generally accepted in the United States of America.


                                       21



The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 3 to the
financial  statements,  the Company has had recurring losses since its inception
and has a working capital  deficiency as of December 31, 2004.  These conditions
raise  substantial  doubt  about its  ability to  continue  as a going  concern.
Management's  plans  regarding  those  matters also are described in Note 3. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/ Marcum & Kliegman LLC
-------------------------
Marcum & Kliegman LLC

July 29, 2005
New York, New York


                                       22



                                                           IDK ENTERPRISES, INC.

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------


                              ASSETS

CURRENT ASSETS
  Cash ........................................................         $ 22,497
  Accounts receivable .........................................          216,960
  Prepaid expenses and other current assets ...................            3,874
                                                                        --------

    Total Current Assets ......................................         $243,331

PROPERTY AND EQUIPMENT, Net ...................................           26,921

DEFERRED FINANCING FEES, Net ..................................          121,900

CUSTOMER LIST, Net ............................................           22,500

COMPUTER SOFTWARE, Net ........................................          303,078
                                                                        --------

    TOTAL ASSETS ..............................................         $717,730
                                                                        ========


                                       23



                                                           IDK ENTERPRISES, INC.

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------


             LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Accounts payable ...........................................      $    36,633
  Accrued compensation .......................................          143,408
  Accrued expenses ...........................................           24,464
  Deferred revenue ...........................................          145,275
  Advances from prospective acquirer .........................          657,847
  Accrued interest ...........................................          583,291
                                                                    -----------

    Total Current Liabilities ................................      $ 1,590,918

SERIES A MANDATORILY REDEEMABLE
  CONVERTIBLE PREFERRED STOCK (Liquidation
  Preference $9,600,000) .....................................        4,358,769
                                                                    -----------

    TOTAL LIABILITIES ........................................        5,949,687

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
  Common stock, par value $0.01; 10,000,000 shares
    authorized; 100 shares issued and outstanding ............                1
  Additional paid in capital .................................        2,058,841
  Deferred compensation ......................................         (383,627)
  Accumulated deficit ........................................       (6,907,172)
                                                                    -----------

    TOTAL STOCKHOLDERS' DEFICIENCY ...........................       (5,231,957)
                                                                    -----------

    TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY ...........      $   717,730
                                                                    ===========


                                       24



                                                           IDK ENTERPRISES, INC.

                                                        STATEMENTS OF OPERATIONS

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                        2004            2003
                                                     -----------    -----------

REVENUE
  Software licenses ..............................   $   695,651    $ 1,203,632
  Maintenance and support ........................       287,771        250,361
  Professional services ..........................        56,321         73,345
                                                     -----------    -----------

    TOTAL REVENUE ................................     1,039,743      1,527,338

COST OF REVENUE ..................................       279,764        270,105
                                                     -----------    -----------

    GROSS PROFIT .................................       759,979      1,257,233
                                                     -----------    -----------

OPERATING EXPENSES
  Salaries and employee benefits .................     2,366,630      3,632,401
  Selling, general and administrative expenses ...       694,208        907,291
  Depreciation and amortization ..................       290,666        252,178
                                                     -----------    -----------

    TOTAL OPERATING EXPENSES .....................     3,351,504      4,791,870
                                                     -----------    -----------

    LOSS FROM OPERATIONS .........................    (2,591,525)    (3,534,637)

OTHER EXPENSE
  Interest expense, net ..........................      (454,415)      (278,010)
                                                     -----------    -----------

    LOSS BEFORE INCOME TAXES .....................    (3,045,940)    (3,812,647)

INCOME TAXES .....................................          --             --
                                                     -----------    -----------

    NET LOSS .....................................   $(3,045,940)   $(3,812,647)
                                                     ===========    ===========


                                       25



                                                           IDK ENTERPRISES, INC.

                                 STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------



                                                                    Additional
                                               Common Stock           Paid-in      Deferred      Accumulated
                                           Shares        Amount       Capital    Compensation      Deficit         Total
                                        -----------   -----------   -----------   -----------    -----------    -----------
                                                                                                       
BALANCE - January 1, 2003 ...........           100   $         1   $   224,484   $      --      $   (48,585)   $   175,900

Deferred compensation related to
  the issuance of employee stock
  options ...........................          --            --       1,657,977    (1,657,977)          --             --

Amortization of deferred compensation          --            --            --       1,036,236           --        1,036,236

Net loss ............................          --            --            --            --       (3,812,647)    (3,812,647)
                                        -----------   -----------   -----------   -----------    -----------    -----------

BALANCE - December 31, 2003 .........           100   $         1   $ 1,882,461   $  (621,741)   $(3,861,232)   $(2,600,511)
                                        ===========   ===========   ===========   ===========    ===========    ===========



                                       26



                                                           IDK ENTERPRISES, INC.

                      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY), Continued

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------



                                                                    Additional
                                               Common Stock           Paid-in       Deferred     Accumulated
                                           Shares        Amount       Capital    Compensation      Deficit         Total
                                        -----------   -----------   -----------   -----------    -----------    -----------
                                                                                                       
BALANCE - January 1, 2004 ...........           100   $         1   $ 1,882,461   $  (621,741)   $(3,861,232)   $(2,600,511)

Deferred compensation related to
  the issuance of employee stock
  options ...........................          --            --         176,380      (176,380)          --             --

Amortization of deferred compensation          --            --            --         414,494           --          414,494

Net loss ............................          --            --            --            --       (3,045,940)    (3,045,940)
                                        -----------   -----------   -----------   -----------    -----------    -----------

BALANCE - December 31, 2004 .........           100   $         1   $ 2,058,841   $  (383,627)   $(6,907,172)   $(5,231,957)
                                        ===========   ===========   ===========   ===========    ===========    ===========



                                       27



                                                           IDK ENTERPRISES, INC.

                                                        STATEMENTS OF CASH FLOWS

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                        2004            2003
                                                    -----------     -----------

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss .....................................    $(3,045,940)    $(3,812,647)
                                                    -----------     -----------
  Adjustments to reconcile net loss to net
    cash used in operating activities:
    Depreciation and amortization ..............        570,430         522,283
    Stock based compensation ...................        414,494       1,036,236
    Non-cash interest expense ..................        451,276         276,877
  Changes in assets and liabilities:
    Accounts receivable ........................       (144,553)         51,475
    Other current assets .......................         11,511          41,766
    Accounts payable ...........................        (81,207)        117,840
    Accrued compensation .......................         18,723         124,685
    Accrued expenses ...........................        (32,276)        (92,350)
    Deferred revenue ...........................         (4,932)         87,709
                                                    -----------     -----------

      TOTAL ADJUSTMENTS ........................      1,203,466       2,166,521
                                                    -----------     -----------

      NET CASH USED IN OPERATING ACTIVITIES ....     (1,842,474)     (1,646,126)
                                                    -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash advanced to acquiree business ...........           --          (110,096)
  Cash received upon foreclosure of business ...           --             1,359
  Purchases of property and equipment ..........         (5,920)           --
                                                    -----------     -----------

      NET CASH USED IN INVESTING ACTIVITIES ....    $    (5,920)    $  (108,737)
                                                    -----------     -----------


                                       28



                                                           IDK ENTERPRISES, INC.

                                             STATEMENTS OF CASH FLOWS, Continued

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                         2004           2003
                                                     -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES
  Bank overdraft .................................   $      --      $       (92)
  Proceeds from issuance of Series A mandatorily
    redeemable convertible preferred stock .......     1,400,000      1,734,999
  Fees paid to placement agent ...................      (167,000)          --
  Advances from prospective acquirer .............       657,847           --
  Advances from officer ..........................        39,000         36,000
  Repayment of advances from officer .............       (75,000)          --
                                                     -----------    -----------

      NET CASH PROVIDED BY FINANCING ACTIVITIES ..     1,854,847      1,770,907
                                                     -----------    -----------

      NET INCREASE IN CASH .......................         6,453         16,044

CASH - Beginning .................................        16,044           --
                                                     -----------    -----------

CASH - Ending ....................................   $    22,497    $    16,044
                                                     ===========    ===========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the years for:

  Interest .......................................   $     3,279    $     1,133

Supplemental non-cash investing and financial
  activity:

  Acquisition of business upon foreclosure of
    notes in 2003:
    Current tangible assets acquired .............   $      --      $   181,036
    Non-current tangible assets acquired .........          --           60,000
    Current liabilities assumed ..................          --         (211,591)
    Intangible assets acquired ...................          --        1,379,292
    Carrying value of secured notes ..............          --       (1,300,000)
    Cash received upon foreclosure of business ...          --            1,359
                                                     -----------    -----------
      Cash advanced to acquiree business .........   $      --      $   110,096
                                                     ===========    ===========


                                       29



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - THE COMPANY

       ORGANIZATION
       IDK  Enterprises,  Inc.  (the  "Company"),  a Delaware  corporation,  was
       founded on October  12, 2002 to acquire the  operations  of  NETdelivery,
       Inc.  ("NETdelivery"),  a developer of secure  online forms and real-time
       data   collection   software   programs.   The  Company's   products  are
       specifically designed for, and marketed to, federal,  state and local law
       enforcement agencies and commercial insurance companies.  As described in
       Note 2, the Company  completed its  acquisition of  NETdelivery  upon the
       foreclosure  of  certain  secured  notes  on  January  31,  2003  and has
       continued as the successor entity to NETdelivery's business.


NOTE 2 - ACQUISITION OF ASSETS AND BUSINESS OF NETDELIVERY, INC.

       On January 31, 2003, the Company  acquired the business and operations of
       NETdelivery for $1,410,096.  The Company  acquired  NETdelivery  upon its
       foreclosure  of  secured  notes  of  NETdelivery  that  were  held by the
       Company's common stockholders and certain of its preferred  stockholders.
       Such  stockholders  assigned their notes and underlying rights to the net
       assets of NETdelivery to the Company in exchange for 1,376,350  shares of
       the Company's Series A Mandatorily  Redeemable Preferred Stock ("Series A
       Preferred") for $1,300,000 which was deemed to be equal to the fair value
       of the  notes,  based  on the  value  of the  underlying  collateral.  In
       addition, the Company made $110,096 in cash advances to NETdelivery prior
       to the foreclosure  that were accounted for as part of the aggregate cost
       of acquiring NETdelivery's net assets.

       The Company recorded the tangible assets acquired and liabilities assumed
       from NETdelivery at their fair values at the date of the foreclosure. The
       aggregate  amount of the note plus the cash advances made to  NETdelivery
       in excess of the fair value of the net assets  acquired was  allocated to
       NETdelivery's  computer  software and customer list. The following  table
       provides a breakdown of the Company's allocation of the cost of acquiring
       NETdelivery to the fair values of assets acquired and liabilities assumed
       from NETdelivery at the date of the foreclosure:

       Fair Value of Tangible Assets
         Cash ........................................         $   1,359
         Accounts receivable .........................           181,036
         Property and equipment ......................            60,000
                                                               ---------
                 Net Tangible Assets .................           242,395

       Liabilities Assumed:
         Accrued expenses ............................          (149,091)
         Deferred revenue ............................           (62,500)
                                                               ---------
         Liabilities assumed .........................          (211,591)
                                                               ---------
                 Net Assets Acquired .................         $  30,804
                                                               ---------


                                       30



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 2 - ACQUISITION OF ASSETS AND BUSINESS OF NETDELIVERY, INC., continued

                 Net Assets Acquired
                   (Balance brought forward) ...........       $   30,804

       Value of Excess Over Purchase Price of Net 
         Assets Acquired Allocated to:
           Computer software ...........................          839,292
           Customer list ...............................          540,000
                                                               ----------

                 Total .................................       $1,410,096
                                                               ==========


NOTE 3 - LIQUIDITY AND FINANCIAL CONDITION

       The accompanying  financial  statements have been prepared  assuming that
       the Company will  continue as a going  concern,  which  contemplates  the
       realization of assets and the  satisfaction  of liabilities in the normal
       course of business. The Company incurred a net loss of $3,045,940 for the
       year ended December 31, 2004. In addition,  the Company's working capital
       deficiency amounted to $1,347,587 and its accumulated deficit amounted to
       $6,907,172  at December  31,  2004.  As described in Note 16, the Company
       consummated a merger with Complete  Security  Solutions,  Inc.  ("CSSI"),
       which  subsequently  merged  with  and into  Patron  Systems,  Inc.  (the
       "Parent")  on February 25,  2005.  The Company  will require  substantial
       additional  working capital to sustain its  operations,  while the Parent
       continues  its  efforts  to  integrate  the  business  into its  existing
       operations.

       The Company  expects to  continue  incurring  losses for the  foreseeable
       future and cannot  provide any  assurance  as to when,  if ever,  it will
       become a profitable  enterprise due to the inherent  uncertainty  that is
       related to  establishing  the  commercial  feasibility  of  technological
       products and  developing  a presence in new markets.  The Parent also has
       limited  capital  resources and is subject to  substantial  contingencies
       that also raise doubt as to its  ability to continue as a going  concern.
       Neither  the Parent nor the  Company  has  obtained  any  commitments  to
       provide the Company with new financing.  These matters raise  substantial
       doubt about the  Company's  ability to continue as a going  concern.  The
       financial  statements  do not  include  any  adjustments  relating to the
       recoverability  of recorded  asset  amounts  that might be necessary as a
       result of the above uncertainty.


                                       31



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       ACCOUNTS RECEIVABLE
       The Company has a policy of reserving for uncollectible accounts based on
       its best estimate of the amount of probable credit losses in its existing
       accounts  receivable.  The  Company  periodically  reviews  its  accounts
       receivable  to determine  whether an  allowance is necessary  based on an
       analysis of past due  accounts and other  factors that may indicate  that
       the realization of an account may be in doubt. Account balances deemed to
       be  uncollectible  are  charged  to the  allowance  after  all  means  of
       collection  have  been  exhausted  and  the  potential  for  recovery  is
       considered  remote.  As of December 31,  2004,  the Company has had a low
       occurrence  of  credit  losses  and,   based  on  a  review  of  balances
       outstanding,  has determined  that an allowance for doubtful  accounts is
       not necessary.

       REVENUE RECOGNITION
       The Company  derives its revenues from sales of computer  software,  post
       contract customer support and professional consulting services.

       The Company  applies the revenue  recognition  principles set forth under
       AICPA Statement of Position ("SOP") 97-2, "Software Revenue Recognition,"
       with respect to its sales of computer software and post contract customer
       support  arrangements.  Revenues from  software  license  agreements  are
       generally  recognized  upon delivery of software to the customer.  All of
       the Company's software sales are supported by a written contract or other
       evidence of a sale transaction such as a customer  purchase order.  These
       forms of evidence  clearly  indicate the selling  price to the  customer,
       shipping terms,  payment terms (generally 30 days) and refund policy,  if
       any. The selling  prices of these products are fixed at the time the sale
       is consummated.

       Revenue from post contract  customer support  arrangements or undelivered
       elements are deferred and  recognized at the time of delivery or over the
       period in which  the  services  are  performed  based on vendor  specific
       objective  evidence of fair value for such undelivered  elements.  Vendor
       specific  objective evidence is typically based on the price charged when
       an element is sold  separately or, if an element is not sold  separately,
       on the price  established by an authorized level of management,  if it is
       probable that the price, once established,  will not change before market
       introduction. The Company uses the residual method prescribed in SOP 98-9
       to  allocate  revenues  to  delivered  elements  once it has  established
       vendor-specific evidence for such undelivered elements.

       Professional  consulting services are billed based on the number of hours
       of consulting  services hours provided and the hourly billing rates.  The
       Company  recognizes  revenue under these  arrangements  as the service is
       performed.

       PROPERTY AND EQUIPMENT
       Property  and   equipment  are  stated  at  cost,   net  of   accumulated
       depreciation  and  amortization.  Depreciation and amortization are being
       computed over the estimated  useful lives of the assets,  generally three
       years, using the straight-line method.  Repairs and maintenance costs are
       expensed as incurred.


                                       32



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

       SOFTWARE DEVELOPMENT COSTS
       In  accordance  with  Statement  of  Financial  Accounting  Standard  No.
       ("SFAS") 86,  "Accounting for the Costs of Computer  Software to be Sold,
       Leased  or  Otherwise  Marketed,"  software  development  costs  incurred
       subsequent to the establishment of technological  feasibility through the
       product's  general   availability  are  capitalized.   The  Company  also
       capitalizes the cost of improvements to its existing products that extend
       the life or  significantly  improve  the  marketability  of the  original
       product and  enhancements  that  require a redesign of all or part of the
       existing product.

       The Company did not incur any  capitalizable  software  development costs
       during the years ended December 31, 2004 and 2003.

       IMPAIRMENT OF LONG-LIVED ASSETS
       The Company  periodically  reviews its  long-lived  assets for impairment
       whenever  events or changes in  circumstances  indicate that the carrying
       amount of the assets may not be fully recoverable. The Company recognizes
       an  impairment  loss when the sum of  expected  undiscounted  future cash
       flows is less  than the  carrying  amount  of the  asset.  The  amount of
       impairment is measured as the  difference  between the asset's  estimated
       fair value and its book value.  The Company did not consider it necessary
       to record any impairment charges during the year ended December 31, 2004.

       STOCK-BASED COMPENSATION
       SFAS No. 123, "Accounting for Stock-Based Compensation," allows companies
       to account for  stock-based  compensation  using either the provisions of
       SFAS 123 or the  provisions  of  Accounting  Principles  Board of Opinion
       (APB) No. 25,  "Accounting  for Stock Issued to Employees,"  but requires
       pro forma  disclosure in the notes to the financial  statements as if the
       measurement provisions of SFAS 123 had been adopted. The Company accounts
       for its stock-based employee  compensation in accordance with APB No. 25.
       The  following  table  illustrates  the  effect on net loss for the years
       ended  December 31, 2004 and 2003, as if the Company had applied the fair
       value  recognition  provisions  of SFAS No. 123 to  stock-based  employee
       compensation:

                                                        For the Years Ended 
                                                            December 31,
                                                     --------------------------
                                                        2004            2003
                                                     -----------    -----------

  Net loss, as reported ..........................   $(3,045,940)   $(3,812,647)
  Add:  stock-based compensation cost reflected
               in the financial statements .......       414,494      1,036,236
  Less:  stock-based employee compensation
               expense under the fair value method      (446,733)    (1,107,897)
                                                     -----------    -----------

            Pro-Forma Net Loss ...................   $(3,078,179)   $(3,884,308)
                                                     ===========    ===========

       RESEARCH AND DEVELOPMENT
       Research and development costs,  which consist of employee  compensation,
       amounted to $123,206 and  $203,870 for the years ended  December 31, 2004
       and 2003,  respectively.  Research and development  costs are expensed as
       incurred.


                                       33



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

       INCOME TAXES
       The Company  accounts  for income  taxes  under  Statement  of  Financial
       Accounting  Standards No. 109,  "Accounting  for Income Taxes" ("SFAS No.
       109").  SFAS No. 109 requires the  recognition of deferred tax assets and
       liabilities  for both the  expected  impact of  differences  between  the
       financial  statements and tax basis of assets and liabilities and for the
       expected  future tax  benefit to be derived  from tax loss and tax credit
       carry forwards. SFAS No. 109 additionally requires the establishment of a
       valuation  allowance to reflect the likelihood of realization of deferred
       tax assets

       ADVERTISING COSTS
       Advertising  costs are  expensed as incurred  and amounted to $76,426 and
       $25,944 for the years ended December 31, 2004 and 2003, respectively.

       USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
       In  preparing   financial   statements  in  conformity   with  accounting
       principles generally accepted in the United States of America, management
       is required to make  estimates and  assumptions  that affect the reported
       amounts of assets and liabilities and the disclosure of contingent assets
       and  liabilities at the date of the financial  statements and revenue and
       expenses  during the reporting  period.  Actual results could differ from
       those estimates.

       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
       In January 2003,  Financial  Accounting  Standards  Board ("FASB") issued
       FASB Interpretation No. 46, "Consolidation of Variable Interest Entities"
       ("FIN 46"). This  interpretation of Accounting  Research Bulletin No. 51,
       "Consolidated  Financial Statements," provides guidance for identifying a
       controlling interest in a variable interest entity ("VIE") established by
       means other than voting interest. FIN 46 also required consolidation of a
       VIE by an enterprise that holds such  controlling  interest.  In December
       2003,  the  FASB  completed  its  deliberations  regarding  the  proposed
       modifications  to FIN  No.,  46 and  issued  Interpretation  Number  46R,
       "Consolidation  of Variable  Interest Entities - an Interpretation of ARB
       51" ("FIN No. 46 R"). The  decisions  reached  included a deferral of the
       effective date and provisions for additional scope exceptions for certain
       types of variable  interests.  Application  of FIN No. 46R is required in
       financial  statements of public  entities that have  interests in VIEs or
       potential  VIEs  commonly  referred to as  special-purpose  entities  for
       periods  ending after December 15, 2003.  Application by public  issuers'
       entities is required in all interim and annual  financial  statements for
       periods   ending  after   December   15,  2004.   The  adoption  of  this
       pronouncement  did not have material  effect on the  Company's  financial
       statements.


                                       34



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

       RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS, continued
       In December 2004, the FASB issued SFAS No. 123R,  "Share Based  Payment."
       This statement is a revision of SFAS Statement No. 123,  "Accounting  for
       Stock-Based  Compensation" and supersedes APB Opinion No. 25, "Accounting
       for Stock Issued to Employees" and its related  implementation  guidance.
       SFAS 123R  addresses  all forms of share based  payment  ("SBP")  awards,
       including  shares  issued under  employee  stock  purchase  plans,  stock
       options, restricted stock and stock appreciation rights. Under SFAS 123R,
       SBP awards  result in a cost that will be  measured  at fair value on the
       awards'  grant  date,  based on the  estimated  number of awards that are
       expected  to  vest  and  will  result  in  a  charge  to  operations  for
       stock-based  compensation  expense.  The charge will be  reflected in the
       Company's  Statements of Operations  during periods in which such charges
       are  recorded,  but will not affect its Balance  Sheets or  Statements or
       Cash Flows. SFAS 123R is effective for public entities that file as small
       business  issuers - as of the  beginning  of the first  annual  reporting
       period of the fiscal  year that  begins  after  December  15,  2005.  The
       Company is  currently  in the process of  evaluating  the effect that the
       adoption of this pronouncement will have on its financial statements.

       In  December  2004,   the  FASB  issued  SFAS  No.  153,   "Exchanges  of
       Non-monetary Assets." SFAS 153 amends APB Opinion No. 29 to eliminate the
       exception for  non-monetary  exchanges of similar  productive  assets and
       replaces it with a general exception for exchanges of non-monetary assets
       that do not  have  commercial  substance.  A  non-monetary  exchange  has
       commercial  substance if the future cash flows of the entity are expected
       to change  significantly  as a result of the exchange.  The provisions of
       SFAS 153 are  effective for  non-monetary  asset  exchanges  occurring in
       fiscal  periods  beginning  after June 15, 2005.  Earlier  application is
       permitted for  non-monetary  asset exchanges  occurring in fiscal periods
       beginning  after  December 16, 2004. The provisions of this Statement are
       intended to be applied prospectively.  The adoption of this pronouncement
       is not  expected  to have  material  effect  on the  Company's  financial
       statements.


NOTE 5 - PROPERTY AND EQUIPMENT

       Property and equipment consist of the following at December 31, 2004:

                                                                 Amount
                                                                --------
       Office equipment .................................       $ 65,920
       Less:  accumulated depreciation ..................        (38,999)
                                                                --------

                 Property and Equipment, Net ............       $ 26,921
                                                                ========

       Depreciation  expense amounted to $20,666 and $18,333 for the years ended
       December 31, 2004 and 2003, respectively.


                                       35



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6 - DEFERRED FINANCING FEES

       Deferred  financing fees,  which include fees paid in connection with the
       issuance of Series A Preferred to certain of the Series A Preferred Stock
       investors (Note 11) are as follows:

                                                                 Amount
                                                               ---------
       Deferred financing fees ..........................      $ 167,000
       Less:  accumulated amortization ..................        (45,100)
                                                               ---------

                 Deferred Financing Fees, Net ...........      $ 121,900
                                                               =========

       Deferred financing fees are being amortized over the term of the Series A
       Preferred shares to their earliest  mandatory  redemption date of January
       9, 2008.  Amortization of deferred financing fees amounted to $38,400 and
       $6,700 for the years ended December 31, 2004 and 2003, respectively,  and
       is  included  as a  component  of  interest  expense in the  accompanying
       statements of operations.


NOTE 7 - CUSTOMER LIST

       The  customer  list,  which  amounted to  $22,500,  is  presented  net of
       amortization  and is being amortized over 2 years.  Amortization  expense
       amounted  to  $270,000  and  $247,500  for 2004 and  2003,  respectively.
       Amortization for 2005 is $22,500.


NOTE 8 - COMPUTER SOFTWARE

       Computer  software,  which consists of software acquired from NETdelivery
       amounts to $303,078 and is presented net of accumulated  amortization  of
       $536,214. Computer software is being amortized over 3 years. Amortization
       expense  amounted to $279,764 and  $256,450 for the years ended  December
       31, 2004 and 2003, respectively,  and is included in cost of sales in the
       accompanying statements of operations.  Amortization of computer software
       is $279,764 and $23,314 for 2005 and 2006, respectively.


NOTE 9 - ADVANCES FROM PROSPECTIVE ACQUIRER

       In 2004, the Company received an aggregate of $657,847 in working capital
       advances from CSSI. The advances,  which are  non-interest  bearing,  are
       payable on demand (Note 16).


NOTE 10 - ADVANCES FROM OFFICER

       In 2003, the Company  received a working  capital advance from an officer
       amounting to $36,000. In 2004, the Company received an additional $39,000
       from the officer as an advance.  The advances  bear interest at a rate of
       10% per annum.  The Company  repaid the  aggregate  principal  balance of
       $75,000, plus accrued interest amounting to $4,412, in 2004.


                                       36



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11 - SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

       The Company is authorized  to issue up to 10,000,000  shares of preferred
       stock  with a par  value of  $0.01  per  share.  The  Company's  board of
       directors  (the  "Board")  has  designated  5,376,350  of these shares as
       Series A Preferred,  with voting  rights equal to one vote for each share
       of common stock into which the Series A Preferred is convertible.

       As of December 31, 2004, the Company has issued an aggregate of 4,546,348
       shares of its Series A Preferred including (1) 1,376,350 shares issued in
       2002 in  exchange  for the  rights  to the net  assets  and  business  of
       NETdelivery  described  in  Note  2,  and (2)  3,169,998  shares  for net
       proceeds  of  $2,966,661  ($3,134,999  gross  proceeds  less  $68,338  of
       placement agent's fees) in 2003 and 2004. In addition, the Company issued
       to investors of 1,496,350 of the Series A Preferred  shares,  warrants to
       purchase up to 449,088  shares of common  stock at an  exercise  price of
       $1.00 per share expiring at various times through February 6, 2007.

       The Series A Preferred  is  convertible  into common stock at any time at
       the option of the holder based on a formula, which currently results in a
       one-for-one  exchange  ratio of preferred for common,  subject to certain
       anti-dilution  provisions.  The Series A Preferred automatically converts
       into shares of the  Company's  common stock upon the  effectiveness  of a
       registration  statement  filed under the Securities Act of 1933,  with an
       offering  price per share of at least five times the original issue price
       of the Series A Preferred  Stock that results in aggregate  cash proceeds
       of at least $20,000,000.

       The  Company  has  reserved  4,995,436  shares  of its  common  stock for
       issuance upon the  conversion  of its  redeemable  convertible  preferred
       stock and exercise of the related common stock purchase warrants.

       The  Series  A  Preferred  also  features  (1) a  liquidation  preference
       entitling  the  holders  of the Series A  Preferred  to be paid an amount
       equal to twice the original  purchase  price per share,  plus any accrued
       but unpaid dividends, upon a liquidation event as defined, (2) cumulative
       dividends at the rate of 8% per annum,  and (3) a right to participate in
       dividends,  on a pro rata basis with the common stockholders,  based upon
       the number of common shares into which the Series A are  convertible,  if
       and when declared by the board of directors.  The holders of the Series A
       Preferred,  voting together as a class, are entitled to elect two members
       to the Board of Directors.

       One or more  holders of shares of the Series A Preferred  can require the
       Company  at any time  after  January  9,  2008 to redeem  their  Series A
       Preferred  shares at the  greater of their fair value or  original  issue
       price,  plus  accrued  but  unpaid  dividends.  Redemption  payments,  if
       demanded,  would  be  payable  in two  annual  installments  of 50%  each
       beginning 120 days following the Company's receipt of a redemption notice
       by the holders of the Series A Preferred Stock.


                                       37



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 11 - SERIES A MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK, continued

       The Company  accounted for the issuance of 1,496,350 shares of its Series
       A Preferred, with common stock purchase warrants, in accordance with EITF
       00-27,  "Convertible  Securities with Beneficial  Conversion Features and
       Contingently  Adjustable  Conversion Ratios".  Accordingly,  the Series A
       Preferred stock is presented in the  accompanying  balance sheet,  net of
       the  unamortized  portion of $300,834 of  aggregate  discounts  resulting
       from:  (1) an allocation  of the gross  proceeds to the  respective  fair
       values of the Series A Preferred and common stock  purchase  warrants and
       (2) beneficial  conversion  features based on the "effective"  conversion
       prices  of  the  Series  A  Preferred.  The  unamortized  portion  of the
       aggregate discount amounts to $187,580 at December 31, 2004.

       The Series A Preferred stock discount is being amortized over the term of
       such shares to their  earliest  mandatory  redemption  date of January 9,
       2008. The accretion of the Series A Preferred to its mandatory redemption
       amount  and  contractual  dividends  are  included  in  the  accompanying
       financial  statements as a component of interest  expense.  The following
       table  presents  a summary of the Series A  Preferred  stock  contractual
       dividends and accretion of the discount:

                                                           For the Year Ended
                                                              December 31,
                                                          -------------------
                                                            2004       2003
                                                          --------   --------
       Contractual dividends at 8% per annum ..........   $358,407   $215,708
       Accretion of Series A Preferred to its mandatory
          redemption amount ...........................     54,469     54,469
                                                          --------   --------

                                                          $412,876   $270,177
                                                          ========   ========

       The  Company  classified  the Series A Preferred  as a  liability  in the
       accompanying  balance sheet in accordance with SFAS 150,  "Accounting for
       Certain Financial  Instruments with  Characteristics  of both Liabilities
       and  Equity,"  since it is  mandatorily  redeemable  at the option of the
       holder.

       In  addition  to the above,  the Company  paid a 10%  transaction  fee in
       connection  with the  issuance  of Series A  Preferred  to certain of the
       Series A Preferred  investors,  which amounted to an aggregate of $67,000
       in 2003 and $100,000 in 2004 (Note 6).


                                       38



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 12 - COMMITMENTS

       The Company  leases its  facilities  and other  certain  equipment  under
       non-cancelable operating lease agreements expiring at various other times
       through August 2007. The future minimum lease payments as of December 31,
       2004 are as follows:

       For the Year Ended
          December 31,           Office Space         Equipment          Total
       ------------------        ------------         ---------          -------
              2005                   $60,000             $3,240          $63,240
              2006                        --              3,240            3,240
              2007                        --                810              810
                                     -------             ------          -------

                                     $60,000             $7,290          $67,290
                                     =======             ======          =======

       Rent  expense  under  these  leases,  including  the  Company's  share of
       operating expenses, amounted to $107,750 and $137,363 for the years ended
       December 31, 2004 and 2003, respectively.


NOTE 13 - EMPLOYEE BENEFITS

       EQUITY INCENTIVE PLAN
       The Company adopted,  effective in 2004, the IDK  Enterprises,  Inc. 2004
       Equity Incentive Award Plan (the Plan) for eligible employees,  officers,
       directors,  Board members and  consultants  to IDK.  Under the Plan,  the
       Company may grant stock  options,  restricted  stock awards,  performance
       share  awards,  dividend  equivalents,   restricted  stock  units,  stock
       payments and stock  appreciation  rights.  A total of 2,743,697 shares of
       common stock have been reserved for issuance under the Plan.

       Options issued under the Plan  generally  expire ten years from the grant
       date or three months after a participant's  termination of employment and
       vest as outlined in the individual  grant  agreements.  These options may
       only be issued at the discretion of the Board.

       The Board may also provide in a  participant's  grant  agreement that the
       participant  may  exercise  options  granted  at any time  prior to their
       termination,  provided that shares of stock  acquired upon exercise of an
       option which have not been fully vested may be subject to any forfeiture,
       transfer or other  restrictions  as the Board may  determine  in its sole
       discretion.


                                       39



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 13 - EMPLOYEE BENEFITS, continued

       EQUITY INCENTIVE PLAN, continued
       The  following  is a summary of option  activity  of the Plan in 2003 and
       2004:



                                               2004                             2003
                                    ---------------------------      ---------------------------
                                                    Weighted                         Weighted
                                                    Average                          Average
                                    Options      Exercise Price      Options      Exercise Price
                                    ---------------------------      ---------------------------
                                                                             
Outstanding - Beginning of Year     1,842,197         $0.10                 --       $    --
  Granted                             195,978          0.10          1,842,197          0.10
  Cancellations and forfeitures            --            --                 --            --
  Exercised                                --            --                 --            --
                                    ---------                       ----------         

Outstanding - End of Year           2,038,175         $0.10          1,842,197         $0.10
                                    =========         =====          =========         =====

Options Exercisable                 1,611,922                        1,151,373             
                                    =========                        =========


       At December 31, 2004, all of the Company's stock options have an exercise
       price of $0.10 per share and a fair value of $0.97.  The weighted average
       remaining contractual life of outstanding stock options is 9.5 years.

       401(K) PLAN
       The Company maintains a defined benefit plan (the Plan) established under
       the provisions of Internal  Revenue Code Section 401(k),  covering all of
       its full-time employees. Participants may make voluntary contributions to
       the Plan up to the maximum  amount  allowed by law.  The Company may also
       make discretionary matching  contributions.  The Company did not make any
       contributions to the Plan during 2004 or 2003.


NOTE 14 - INCOME TAXES

       As of December 31, 2004,  the Company has incurred  book losses since its
       inception of  $6,907,172  and estimates  that it has net  operating  loss
       carryforwards of approximately $4,300,000 that may be available to offset
       future taxable income,  if any, through 2024. The Company has established
       a 100%  valuation  allowance for the deferred tax assets arising from the
       net operating loss and other  temporary  differences,  including the book
       and tax bases of its intangible assets, as management believes that it is
       more likely than not that their benefit,  if any, will not be realized in
       the future.

       The utilization of the net operating losses may be subject to substantial
       limitations due to the "change of ownership" provisions under Section 382
       of the Internal Revenue Code and similar state provisions, as a result of
       the  Company's  merger  with CSSI and CSSI's  subsequent  merger with the
       Parent.


                                       40



                                                           IDK ENTERPRISES, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 15 - MAJOR CUSTOMERS AND CONCENTRATION OF CREDIT RISK

       The Company is subject to credit risk concentrations  primarily from cash
       and cash equivalents and accounts  receivable.  The Company's  management
       believes the risk of loss  associated  with cash and cash  equivalents is
       very low since cash and cash  equivalents  are  maintained in a financial
       institution.  Accounts  receivable are due from commercial and government
       organizations  located  both in the United  States  and  internationally.
       Accounts receivable are generally due within 30 days and no collateral is
       required.

       One customer  accounted for 43% of the Company's  revenue during the year
       ended December 31, 2004. Two customers accounted for 69% of the Company's
       revenue for the year ended December 31, 2003. Two customers accounted for
       86% of the Company's accounts receivable at December 31, 2004

       Sales to customer outside the United States, including Canada, Sweden and
       Australia,  amounted  to  $725,808  and  $1,352,294  for the years  ended
       December 31, 2004 and 2003, respectively.


NOTE 16 - SUBSEQUENT EVENTS

       MERGER OF IDK ENTERPRISES, INC. INTO COMPLETE SECURITY SOLUTIONS, INC.
       On  February  24,  2005,  the Company  merged  with CSSI,  pursuant to an
       Agreement  and Plan of Merger,  by and between  the  Company,  CSSI,  IDK
       Acquisition Sub, LLC, ("IDK LLC") and George M. Middlemas, representative
       of  the  Company's  stockholders.  IDK  LLC  survived  the  merger  as  a
       wholly-owned  subsidiary  of CSSI and all of the issued  and  outstanding
       common  and  preferred   stock  of  the  Company  was  retired  upon  the
       effectiveness of the merger,

       MERGER OF COMPLETE SECURITY SOLUTIONS, INC. INTO PATRON SYSTEMS, INC.
       On February 25, 2005,  pursuant to the filing of an Agreement and Plan of
       Merger, the merger, by and between the Parent and CSSI, became effective.
       The  merger  was  consummated,  pursuant  to  a  definitive  Supplemental
       Agreement,  and the  Agreement  and  Plan of  Merger  (collectively,  the
       "Merger  Agreement") entered into as of February 24, 2005, by and between
       the  Parent,  CSSI  Acquisition  Co.  I.  Inc.,  ("Acquisition  Co."),  a
       wholly-owned  subsidiary of the Parent and CSSI. Pursuant to the terms of
       the Merger  Agreement,  Acquisition  Co. merged with and into CSSI,  with
       CSSI surviving the merger as a wholly-owned subsidiary of the Parent.


                                       41

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors and Stockholders
LucidLine, Inc.

We have audited the accompanying balance sheet of LucidLine, Inc. as of December
31, 2004 and the related statements of operations,  stockholders' deficiency and
cash flows for the years  ended  December  31,  2004 and 2003.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting.  Accordingly,  we express  no such  opinion.  An audit also  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant estimates made by the management,  as well as evaluating the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements referred above present fairly, in all
material respects, the financial position of LucidLine,  Inc. as of December 31,
2004 and the  results of its  operations  and its cash flows for the years ended
December 31, 2004 and 2003, in conformity with accounting  principles  generally
accepted in the United States of America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,  the Company has had recurring losses since its inception
and has a working capital  deficiency as of December 31, 2004.  These conditions
raise  substantial  doubt  about  its  ability  to  continue  as going  concern.
Management's  plans  regarding  those  matters also are described in Note 1. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

/s/ Marcum & Kliegman LLP
-------------------------
Marcum & Kliegman LLP

June 22, 2005
New York, New York


                                       42


                                                                 LUCIDLINE, INC.

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------

                              ASSETS

CURRENT ASSETS
  Accounts receivable, less allowance for doubtful
    accounts of $2,670 ..........................................        $12,422
  Other current assets ..........................................          2,200
                                                                         -------

       Total Current Assets .....................................        $14,622


PROPERTY AND EQUIPMENT, Net .....................................         60,405
                                                                         -------


       TOTAL ASSETS .............................................        $75,027
                                                                         =======


                                       43



                                                                 LUCIDLINE, INC.

                                                                   BALANCE SHEET

                                                               December 31, 2004
--------------------------------------------------------------------------------


          LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Notes payable ............................................        $   577,000
  Current maturities of capital lease ......................              1,912
  Cash overdraft ...........................................                863
  Accounts payable and accrued expenses ....................             47,047
  Loans payable to stockholders ............................             19,581
  Notes payable - stockholders .............................             76,320
                                                                    -----------

       Total Current Liabilities ...........................        $   722,723


CAPITAL LEASE, Net of current maturities ...................              4,401
                                                                    -----------

       TOTAL LIABILITIES ...................................            727,124

COMMITMENTS AND CONTINGENCIES


STOCKHOLDERS' DEFICIENCY
  Common stock, no par value, 10,000,000
    shares authorized; 10,000,000 shares
    issued and outstanding .................................            663,022
  Accumulated deficit ......................................         (1,315,119)
                                                                    -----------

       TOTAL STOCKHOLDERS' DEFICIENCY ......................           (652,097)
                                                                    -----------

       TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY ......        $    75,027
                                                                    ===========


                                       44



                                                                 LUCIDLINE, INC.

                                                        STATEMENTS OF OPERATIONS

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                         2004             2003
                                                      ---------        ---------
REVENUES
  Electronic data protection services ..........      $ 143,915       $ 103,884
  Consulting services ..........................        100,000            --
                                                      ---------       ---------

       TOTAL REVENUES ..........................        243,915         103,884
                                                      ---------       ---------

COSTS OF REVENUES
  Telecom and network ..........................        152,699         103,480
  Cost of consulting services ..................         70,000            --
                                                      ---------       ---------

       TOTAL COSTS OF REVENUE ..................        222,699         103,480
                                                      ---------       ---------

       GROSS PROFIT ............................         21,216             404
                                                      ---------       ---------

OPERATING EXPENSES
  Compensation costs and related
    benefits (including stock-
    based compensation of $84,470 and
    $262,493, respectively) ....................        333,934         324,994
  Professional fees ............................        110,035           4,373
  Consulting fees (including stock-
    based compensation of $51,207 and
    $0, respectively) ..........................        125,047          49,908
  Occupancy costs ..............................         20,460          20,226
  Depreciation .................................         13,402          10,358
  Other ........................................         22,345          11,710
                                                      ---------       ---------

       TOTAL OPERATING EXPENSES ................        625,223         421,569
                                                      ---------       ---------

       OPERATING LOSS ..........................       (604,007)       (421,165)

OTHER EXPENSE
  Interest .....................................         13,297           1,108
                                                      ---------       ---------

       NET LOSS ................................      $(617,304)      $(422,273)
                                                      =========       =========


                                       45



                                                                 LUCIDLINE, INC.

                               STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY

                                  For the Years Ended December 31, 2003 and 2004
--------------------------------------------------------------------------------




                                                                                                    Total
                                                             Common Stock         Accumulated   Stockholders'
                                                         Shares       Amount        Deficit      Deficiency
                                                      -----------   -----------   -----------    -----------
                                                                                              
BALANCE - January 1, 2003 .........................     3,500,000   $    13,022   $  (275,542)   $  (262,520)


Common stock returned to founders .................     1,500,000       150,000          --          150,000
Stock-based compensation ..........................     1,148,000       114,800          --          114,800
Conversion of trade payables into common stock ....       810,000        81,000          --           81,000
Conversion of stockholders' loans into common stock       908,000        90,800          --           90,800
Net loss ..........................................          --            --        (422,273)      (422,273)
                                                      -----------   -----------   -----------    -----------

BALANCE - December 31, 2003 .......................     7,866,000       449,622      (697,815)      (248,193)


Common stock returned to founders .................       735,000        73,500          --           73,500
Stock-based compensation ..........................       121,000        12,100          --           12,100
Conversion of trade payables into common stock ....       647,931        64,793          --           64,793
Conversion of stockholders' loans into common stock       118,000        11,800          --           11,800
Common stock issued for consulting services .......       512,069        51,207          --           51,207
Net loss ..........................................          --            --        (617,304)      (617,304)
                                                      -----------   -----------   -----------    -----------

BALANCE - December 31, 2004 .......................    10,000,000   $   663,022   $(1,315,119)   $  (652,097)
                                                      ===========   ===========   ===========    ===========



                                       46



                                                                 LUCIDLINE, INC.

                                                        STATEMENTS OF CASH FLOWS

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                            2004         2003
                                                         ---------    ---------

CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss ...........................................   $(617,304)   $(422,273)
                                                         ---------    ---------
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation .....................................      13,402       10,358
    Stock-based compensation .........................     135,677      262,493
    Bad debts ........................................          (6)       2,676
    Changes in operating assets and liabilities:
    Accounts receivable ..............................      (9,321)      (4,776)
    Other current assets .............................      (2,200)        --
    Accounts payable and accrued expenses ............     (49,916)     120,337
                                                         ---------    ---------

       TOTAL ADJUSTMENTS .............................      87,636      391,088
                                                         ---------    ---------

       NET CASH USED IN OPERATING ACTIVITIES .........    (529,668)     (31,185)
                                                         ---------    ---------

NET CASH USED IN INVESTING ACTIVITIES
  Purchase of property and equipment .................     (34,830)      (3,309)
                                                         ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of notes payable ............     577,000         --
  (Repayments) advances under bank line of credit ....     (17,000)      17,000
  Repayments under capital lease obligation ..........      (1,262)        --
  Advances from stockholders .........................      20,415       11,692
  Repayments to stockholder ..........................     (13,526)        --
  Proceeds from issuance of common stocks to founders        1,130        2,307
  Cash overdraft .....................................      (2,259)       3,122
                                                         ---------    ---------

       NET CASH PROVIDED BY FINANCING ACTIVITIES .....   $ 564,498    $  34,121
                                                         ---------    ---------


                                       47



                                                                LUCIDLINE, INC.

                                             STATEMENTS OF CASH FLOWS, Continued

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                              2004        2003
                                                            --------    --------

       NET DECREASE IN CASH .............................   $   --     $   (373)

CASH - Beginning of year ................................       --          373
                                                            --------   --------

CASH  - End of year .....................................   $   --     $   --
                                                            ========   ========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during the years for:

    Interest ............................................   $  2,596   $  1,108

    Income taxes ........................................   $   --     $   --

  Non-cash investing and financing activities:

    Stockholders' loans converted into 118,000 and
      908,000 shares of common stock, respectively ......   $ 11,800   $ 90,800

    Trade payables converted into 647,931 and 810,000
       shares of common stock, respectively .............   $ 64,793   $ 81,000

    Acquisition of property and equipment under capital
      lease obligation ..................................   $   --     $  7,875


                                       48



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - BUSINESS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

       NATURE OF BUSINESS
       LucidLine,  Inc. (hereinafter referred to as the "Company) is an Illinois
       corporation   formed  in  May  2001.  The  Company  provides  high  speed
       synchronized  remote  back-up,  retrieval,  and  restoration  services of
       electronic  information to small and mid-size  businesses  under a system
       that accessible over the internet.

       GOING CONCERN
       The accompanying  financial  statements have been prepared  assuming that
       the Company will  continue as a going  concern,  which  contemplates  the
       realization of assets and the  satisfaction  of liabilities in the normal
       course of  business.  The  Company  has had  recurring  losses  since its
       inception. At December 31, 2004, the Company's current liabilities exceed
       its current assets by  approximately  $708,000 and it has a stockholders'
       deficiency of approximately  $652,000.  On February 25, 2005, the Company
       entered  into an  Agreement  and Plan of Merger with Patron  Systems Inc.
       (the  "Parent")  (See  Note  9).  The  Parent  also has  limited  capital
       resources  and is subject to  substantial  contingencies  that also raise
       doubt as to its  ability to  continue  as a going  concern.  Neither  the
       Parent nor the  Company  has  obtained  any  commitments  to provide  the
       Company with new financing.  These matters raise  substantial doubt about
       the  Company's  ability to continue  as a going  concern.  The  financial
       statements do not include any adjustments  relating to the recoverability
       of recorded  asset  amounts  that might be  necessary  as a result of the
       above uncertainty.

       REVENUE RECOGNITION
       The Company provides its electronic information protection services under
       contractual  arrangements  with terms ranging from 1 year to 5 years.  At
       the inception of each  contract,  the Company  activates  the  customer's
       account  for a  contractual  fee that it  amortizes  over the term of the
       contract in  accordance  with Emerging  Issues Task Force Issue  ("EITF")
       00-21, "Revenue Arrangements with Multiple Deliverables." Thereafter, the
       Company  invoices its customers on a monthly basis for services  rendered
       at contractual rates provided for under the terms of its contracts. These
       contracts are  automatically  renewable by the customer unless terminated
       on 30 days written notice, in which case the Company charges the customer
       an early  termination fee equal to the lesser of six months of service or
       the remaining term of the contract.

       The Company also provided marketing  consulting  services to an unrelated
       party during the year ended December 31, 2004, for an aggregate fixed fee
       of $100,000  that it recorded  as revenue at the time the  services  were
       completed.

       CASH AND CASH EQUIVALENTS
       The  Company  considers  all  highly  liquid  securities  purchased  with
       original maturities of three months or less to be cash equivalents. As of
       December 31, 2004, the Company had no cash equivalents.


                                       49



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - BUSINESS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

       ACCOUNTS RECEIVABLE
       Accounts  receivable  have  been  adjusted  for all  known  uncollectible
       accounts.  The  allowance  for doubtful  accounts is the  Company's  best
       estimate  of the  amount  of  probable  credit  losses  in the  Company's
       existing  accounts  receivable.  The Company  reviews its  allowance  for
       doubtful  accounts on a monthly basis and determines the allowance  based
       on an analysis of its past due  accounts.  All past due balances that are
       over 90 days  are  reviewed  individually  for  collectibility.  Accounts
       balances  are  charged  off  against  the  allowance  after  all means of
       collection  have  been  exhausted  and  the  potential  for  recovery  is
       considered remote.

       PROPERTY AND EQUIPMENT
       Property and equipment is stated at cost.  Depreciation is computed using
       the  straight-line  method over the estimated useful lives of the assets.
       Maintenance  and  repairs are  charged to expense as  incurred;  costs of
       major  additions  and  betterments  are  capitalized.  When  property and
       equipment  is sold,  or  otherwise  disposed  of,  the  cost and  related
       accumulated  depreciation  are  eliminated  from  the  accounts  and  any
       resulting gains or losses are reflected in the statement of operations in
       the period of disposal.

       IMPAIRMENT OF LONG-LIVED ASSETS
       The Company  groups and evaluates  property and equipment and  intangible
       assets  excluding  goodwill,  for impairment at the individual  reporting
       unit,  which is the lowest  level at which  individual  cash flows can be
       identified.  When evaluating assets for potential impairment, the Company
       first compares the carrying amount of the asset to the asset's  estimated
       future cash flows  (undiscounted  and without interest  charges).  If the
       estimated  future  cash  flows  used in this  analysis  are less than the
       carrying amount of the asset, an impairment loss calculation is prepared.
       The impairment loss calculation compares the carrying amount of the asset
       to the asset's  estimated future cash flows (discounted and with interest
       charges).  If the carrying  amount exceeds the asset's  estimated  future
       cash flows (discounted and with interest charges),  the loss is allocated
       to the  long-lived  assets  of the  group on a pro rata  basis  using the
       relative carrying amounts of those assets.

       INCOME TAXES
       The  Company  provides  for  federal  and state  income  taxes  currently
       payable,  as well as for those  deferred  because  of timing  differences
       between  reporting income and expenses for financial  statement  purposes
       versus tax purposes.  Deferred tax assets and  liabilities are recognized
       for the future tax consequences  attributable to differences  between the
       carrying  amount  of  assets  and  liabilities  for  financial  reporting
       purposes  and the  amounts  used for income tax  purposes.  Deferred  tax
       assets and  liabilities are measured using the enacted tax rates expected
       to  apply to  taxable  income  in the  years  in  which  those  temporary
       differences  are expected to be recoverable  or settled.  The effect of a
       change in tax rates is  recognized  as income or expense in the period of
       change. A valuation allowance is established,  when necessary,  to reduce
       deferred  income tax assets to the amount that is more likely than not to
       be realized.


                                       50



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - BUSINESS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

       FINANCIAL INSTRUMENTS
       The  Company's  financial   instruments  consist  primarily  of  accounts
       receivable,  accounts  payable  and  accrued  expenses  and  debt,  which
       approximate fair value because of their short-term  maturities.  The fair
       value of notes payable to  stockholders  is not  reasonably  determinable
       based on the related party nature of transactions.

       USE OF ESTIMATES
       The  preparation  of financial  statements in conformity  with  generally
       accepted accounting  principles requires management to make estimates and
       assumptions  that affect the reported  amounts of assets and  liabilities
       and  disclosure of contingent  assets and  liabilities at the date of the
       financial  statements  and the  reported  amounts of revenue and expenses
       during the  reporting  period.  Actual  results  could  differ from those
       estimates.

       RECENT ACCOUNTING PRONOUNCEMENTS
       In  January,  2003,  the FASB  issued  interpretation  No. 46 ("FIN 46"),
       "Consolidation  of Variable Interest  Entities,  an Interpretation of ARB
       No.  51."  FIN 46  requires  certain  variable  interest  entities  to be
       consolidated  by the  primary  beneficiary  of the  entity if the  entity
       investors in the entity do not have the  characteristics of a controlling
       financial  interest  or do not  have  sufficient  equity  at risk for the
       entity to finance its activities  without  additional  financial  support
       from other  parties.  FIN 46 is effective  for all new variable  interest
       entities  created or  acquired  after  January  31,  2003.  For  variable
       interest  entities  created or acquired  prior to  February 1, 2003,  the
       provisions  of FIN 46 must be  applied  for the first  interim  or annual
       period  beginning  after  December 15, 2003. In December  2003,  the FASB
       issued  Interpretation  No.  46(R)  ("FIN  46R")  which  revised  certain
       provisions of FIN 46. Publicly reporting entities that are small business
       issuers  must apply FIN 46R to all  entities  subject to FIN 46R no later
       than the end of the first  reporting  period that ends after December 15,
       2004 (as of December  31,  2004,  for a calendar  year  enterprise).  The
       effective  date includes  those  entities to which FIN 46 had  previously
       been  applied.  However,  prior to the  application  of FIN 46R, a public
       entity that is a small  business  issuer shall apply FIN 46 or FIN 46R to
       those entities that are considered special-purpose entities no later than
       as of the end of the first reporting  period that ends after December 15,
       2003 (as of December 31, 2003 for a calendar year).  The Company does not
       have any  entities  that require  disclosure  or new  consolidation  as a
       result of adopting the provisions of FIN 46 or FIN 46R.

       In May 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
       Derivative Instruments and Hedging Activities." This Statement amends and
       clarifies financial accounting and reporting for derivative  instruments,
       including  certain  derivative  instruments  embedded in other  contracts
       (collectively  referred to as  derivatives)  and for  hedging  activities
       under FASB statement No. 133,  ACCOUNTING FOR DERIVATIVE  INSTRUMENTS AND
       HEDGING  ACTIVITIES.  The  changes in this  Statement  improve  financial
       reporting by requiring that contracts with comparable  characteristics be
       accounted  for  similarly.  This  Statement  is effective  for  contracts
       entered  into or  modified  after June 30,  2003.  The  adoption  of this
       statement  did not have a  material  effect on the  Company's  results of
       operations or financial position.


                                       51



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - BUSINESS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

       RECENT ACCOUNTING PRONOUNCEMENTS, continued
       In May 2003,  the FASB  issued  SFAS No.  150,  "Accounting  for  Certain
       Financial  Instruments  with  Characteristics  of  Both  Liabilities  and
       Equity."  SFAS No.  150 is the  first  phase  of the  FASB's  project  on
       liabilities and equity.  SFAS No. 150 provides  guidance on how an equity
       classifies   and   measures    certain    financial    instruments   with
       characteristics of both liabilities and equity. Many of these instruments
       were  previously  classified  as equity.  For example,  if an  employer's
       issuance of its shares to a key employee  requires the employer to redeem
       the  shares  upon  the  employee's  death,  then  those  shares  must  be
       classified as a liability,  not as equity.  For publicly-held  companies,
       SFAS No. 150 is  effective  for  financial  instruments  entered  into or
       modified  after May 31, 2003 and  pre-existing  instruments as of July 1,
       2003. SFAS No. 150 requires  companies to record the cumulative effect of
       financial instruments existing at the adoption date. The adoption of this
       statement  did not have a  material  impact on the  Company's  results of
       operations or financial position.

       In December 2003, a revision of SFAS 132,  "Employers'  Disclosure  about
       Pension  and  Other  Postretirement   Benefits,"  was  issued,   revising
       disclosure about pension loans and other post retirements  benefits plans
       and requiring additional disclosures about the assets, obligations,  cash
       flows, and net periodic benefit cost of defined benefit pension plans and
       other  defined  benefit   postretirement  plans.  The  adoption  of  this
       statement  did not have a  material  impact on the  Company's  results of
       operations or financial position.

       In December 2004, the FASB issued SFAS No. 153,  "Exchange of Nonmonetary
       Assets." The Statement  amends  Opinion 29 to eliminate the exception for
       nonmonetary exchanges of similar productive assets and replaces it with a
       general  exception for exchanges of  nonmonetary  assets that do not have
       commercial substance.  A nonmonetary exchange has commercial substance if
       the future cash flows of the entity are expected to change  significantly
       as a  result  of the  exchange.  The  provisions  of this  Statement  are
       effective for  nonmonetary  asset  exchanges  occurring in fiscal periods
       beginning  after June 15, 2005.  Earlier  application  is  permitted  for
       nonmonetary  asset exchanges  occurring in fiscal periods beginning after
       December 16, 2004.  The  provisions of this  Statement  should be applied
       prospectively.  The adoption of this  statement is not expected to have a
       material  impact on the  Company's  results of  operations  of  financial
       position.

       SFAS No. 123, "Accounting for Stock-Based  Compensation," encourages, but
       does not require,  companies to record  compensation cost for stock-based
       employee  compensation  plans at fair  value.  The  Company has chosen to
       continue  to account for  stock-based  compensation  using the  intrinsic
       method prescribed in APB Opinion No. 25,  "Accounting for Stock Issued to
       Employees," and related interpretations.  Accordingly,  compensation cost
       for stock options issued to employees is measured as the excess,  if any,
       of the  quoted  market  price of the  Company's  stock at the date of the
       grant over the amount an employee must pay to acquire the stock.


                                       52



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 1 - BUSINESS, GOING CONCERN AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
continued

       RECENT ACCOUNTING PRONOUNCEMENTS, continued
       In December  2004,  the FASB issued  Statement  of  Financial  Accounting
       Standards No. 123(R) ("FAS 123(R)"),  Share-Based  Payment, a revision of
       FAS 123.  FAS 123(R)  requires  an entity to measure the cost of employee
       services received in exchange for an award of equity instruments based on
       the  grant  date  fair  value of the  award  (with  limited  exceptions),
       eliminating  the  alternative  previously  allowed  by FAS 123 to use the
       intrinsic  value method of accounting.  The grant date fair value will be
       estimated   using   option-pricing   models   adjusted   for  the  unique
       characteristics  of  the  instruments  using  methods  similar  to  those
       required by FAS 123 and  currently  used by the Company to calculate  pro
       forma net income and  earnings  per share  disclosures.  The cost will be
       recognized  ratably over the period during which the employee is required
       to provide services in exchange for the award. For private entities,  FAS
       123(R) is effective as of the  beginning of the first annual  period that
       begins after  December 15, 2005. The Company plans to adopt FAS 123(R) as
       of January 1, 2006.  The Company is in the process of evaluating  whether
       FAS 123(R) will have a material  impact on the Company's  overall results
       of operations or financial position.


NOTE 2 - PROPERTY AND EQUIPMENT

       Property and equipment at December 31, 2004 consists of the following:

         Computers and furniture and equipment ...........      $93,778
         Less:  accumulated depreciation .................       33,373
                                                                -------

                   Property and equipment, Net ...........      $60,405
                                                                =======

       The estimated  useful life used for computers and furniture and equipment
       is five years. Depreciation expense for the years ended December 31, 2004
       and 2003 was $13,402 and $10,358, respectively.


NOTE 3 - NOTES PAYABLE

       During the year ended  December 31, 2004, the Company  borrowed  $577,000
       under  various  demand  notes  from  Complete  Security  Solutions,  Inc.
       ("CSSI"),  an  unrelated  entity that was also  acquired by the Parent on
       February  25,  2005 (See Note 9).  These  loans are payable on demand and
       bear  interest at an annual rate of 10%. For the year ended  December 31,
       2004, interest expense on these notes approximated $10,700. The loans are
       secured by all of the assets of the Company.


                                       53



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 4 - STOCKHOLDERS' DEFICIENCY

       The Company and its principal stockholder entered into a stock assignment
       agreement  (the  "Assignment  Agreement")  effective  July 17, 2002.  The
       Assignment Agreement provided for the Company's principal  stockholder to
       assign  and   transfer   4,500,000   shares  of  his  common  stock  (the
       "Accommodation  Shares")  to the  Company  and for the Company to use the
       Accommodation  Shares  for  working  capital  purposes.   The  Assignment
       Agreement also provided for the Company to return, at its own discretion,
       such number of  Accommodation  Shares that it  determined it did not need
       for working capital purposes.

       In year 2002,  the  Company  recorded  the  receipt of the  Accommodation
       Shares as treasury stock at an amount equal to the principal stockholders
       basis of $6,923.  The Company  subsequently  retired  the  aforementioned
       shares.  During the years ended  December 31, 2004 and 2003,  the Company
       used (i) 647,931 and 810,000 shares of available  Accommodation Shares to
       settle  certain  trade  payables,  (ii)  118,000  and  908,000  shares of
       available  Accommodation Shares to convert stockholders' loan into common
       stock and (iii) 121,000 and 1,148,000  shares of available  Accommodation
       Shares to compensate certain employees for services, respectively. During
       the year ended December 31, 2004, the Company also used 512,069 shares of
       available  Accommodation  Shares to compensate certain  non-employees for
       services.

       In accordance  with the terms of the  Assignment  Agreement,  the Company
       returned 735,000 and 1,500,000 shares of Accommodation  Shares at various
       times during the years ended December 31, 2003 and 2004, respectively, to
       either the  principal  stockholder  or  certain  designees.  The  Company
       recorded  the  return of the  unused  Accommodation  Shares at their fair
       value of $.10 per share and recorded a stock-based compensation charge of
       approximately  $72,400 and $147,700 for the years ended December 31, 2004
       and 2003, respectively,  which represents the excess of the fair value of
       the Accommodation Shares over the principal stockholder's original basis.


NOTE 5 - ECONOMIC DEPENDENCY

       MAJOR CUSTOMERS
       During  the year  ended  December  31,  2004,  revenues  earned  from two
       customers totaled $100,000 (41%) and $54,279 (22%),  respectively.  As of
       December 31, 2004, there were no amounts due from these customers.

       During  the year ended  December  31,  2003,  revenues  earned  from five
       customers totaled $11,940 (11%),  $11,940 (11%),  $10,755 (10%),  $12,567
       (12%) and $14,000 (13%), respectively.


                                       54



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6 - COMMITMENTS AND CONTINGENCIES

       CAPITAL LEASE OBLIGATION
       The Company leases machinery and equipment under a capital lease expiring
       in September  2007. The assets and  liabilities  under such capital lease
       were  recorded  at the lower of the present  value of the  minimum  lease
       payments  or the fair value of the  assets.  The assets are  included  in
       property and equipment and are being depreciated over their useful lives.
       Depreciation  expense for the years ended  December  31, 2004 and 2003 on
       the leased equipment was $1,594 and $394, respectively.

       At December 31, 2004,  minimum  future lease  payments under this capital
       lease are as follows:

                             Year Ending
                             December 31,                           Amount
                --------------------------------------------       -------
                                 2005                              $ 3,133
                                 2006                                3,133
                                 2007                                2,611
                                                                   -------
                Total minimum lease payments                         8,877
                Less:  amounts representing interest                 2,564
                                                                   -------
                Present value of net minimum lease payments          6,313
                Current maturities of lease payments                 1,912
                                                                   -------

                          Long-term Capital Lease Obligation       $ 4,401
                                                                   =======

       OPERATING LEASES
       In November 2004, the Company renewed its lease for office space in Palos
       Heights,  Illinois,  expiring  in  October  2007,  for a monthly  rent of
       approximately  $2,000.  Occupancy  costs were $20,460 and $20,226 for the
       years ended December 31, 2004 and 2003, respectively.

       In addition, the Company leases internet network data center services and
       bandwidth  capacity under two different  operating  leases that expire at
       various  dates  through  November  2007  for  a  total  monthly  rent  of
       approximately  $3,000.  Rental  expense  for these  operating  leases was
       approximately  $38,000 and $35,000 for the years ended  December 31, 2004
       and 2003,  respectively,  and is included in telecom and network costs in
       the statements of operations.


                                       55



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 6 - COMMITMENTS AND CONTINGENCIES, continued 

       OPERATING LEASES, continued 
       As of December 31, 2004,  the future  minimum  rental  commitments  under
       non-cancelable operating leases are as follows:

                                        Internet Network
        Years Ended                        Date Center       Bandwidth
        December 31,     Office Space       Services          Capacity
        -----------      ------------   ----------------     ---------

            2005           $22,000           $ 8,572           $22,000
            2006            22,000              --              22,000
            2007            18,000              --              19,200
                           -------           -------           -------

                           $62,000           $ 8,572           $63,200
                           =======           =======           =======


NOTE 7 - INCOME TAXES

       At December 31, 2004,  the Company had  approximately  $1,315,000  of net
       operating  loss  carryforwards  for income tax purposes,  which expire at
       various  times through  December 31, 2024.  As of December 31, 2004,  the
       Company has a deferred tax asset of approximately  $473,000  representing
       the benefits of its net operating loss and certain temporary differences,
       which include  differences in the tax bases of certain intangible assets.
       The Company has  established a full valuation  allowance for its deferred
       tax since it is more likely than not the  Company  will not realize  this
       benefit  in  future  periods.   The  Company's  ability  to  utilize  its
       carryforwards  may be subject to an annual  limitation in future periods,
       pursuant to Section 382 of the Internal Revenue Code of 1986, as amended.


NOTE 8 - RELATED PARTY TRANSACTIONS

       LOANS PAYABLE TO STOCKHOLDERS
       Since  inception,   the  Company  has  obtained  financing  from  certain
       stockholders  for its working  capital  needs.  At December 31, 2004, the
       outstanding  balance of  stockholders'  loans amounted to $19,581.  These
       loans are due on demand and are  non-interest  bearing.  During the years
       ended December 31, 2004 and 2003, the Company  converted loans of $11,800
       and $90,800  into  118,000 and 908,000  shares of  Accommodation  Shares,
       respectively.

       NOTES PAYABLE - STOCKHOLDERS
       Since  inception,   the  Company  has  obtained  financing  from  certain
       stockholders.  At December 31, 2004, the principal and interest amount of
       such  notes  are  approximately  $76,300.  These  notes  carry an  annual
       interest rate of 5% and are payable on demand.


                                       56



                                                                 LUCIDLINE, INC.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 9 - SUBSEQUENT EVENTS

       On February 25, 2005,  pursuant to the filing of an Agreement and Plan of
       Merger,  Patron Systems Inc.'s merger with the Company became  effective.
       The  merger  was  consummated  pursuant  to the  definitive  Supplemental
       Agreement  and the  Agreement  and  Plan of  Merger,  entered  into as of
       February  24,  2005,  each among  Patron  Systems,  Inc.  ("Patron"),  LL
       Acquisition I Corp., a wholly-owned subsidiary of Patron and the Company.
       Pursuant to the terms of the  Supplemental  Agreement  and  Agreement and
       Plan of Merger with the Company,  LL Acquisition I Corp.  merged with and
       into the Company, with the Company surviving the merger as a wholly-owned
       subsidiary of Patron.  In connection  with the Company's  merger,  Patron
       issued 4,400,000 shares of its common stock and paid $200,000 in cash, in
       the  aggregate,  in  exchange  for all of the  outstanding  shares of the
       capital   stock  of  the   Company.   The  cash  portion  of  the  merger
       consideration was disbursed on February 28, 2005.

       On April 1, 2005, the Company  renewed its existing  lease  agreement for
       its internet  network data center  services,  expiring on March 31, 2006,
       for a monthly rent of approximately $4,900.


                                       57

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------


To the Board of Directors and Stockholders
Entelagent Software Corp,


We  have  audited the accompanying balance sheet of Entelagent Software Corp. as
of  December  31,  2004  and the related statements of operations, stockholders'
equity  (deficiency)  and  cash  flows for the years ended December 31, 2004 and
2003.  These  financial  statements  are  the  responsibility  of  the Company's
management.  Our  responsibility  is  to  express  an opinion on these financial
statements  based  on  our  audits.

We  conducted  our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are  free  of  material misstatement. The Company is not required to
have,  nor  were  we  engaged  to perform, an audit of its internal control over
financial  reporting. Our audits included consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in  the  circumstances,  but  not  for the purpose of expressing an
opinion  on  the  effectiveness of the Company's internal control over financial
reporting.  Accordingly,  we  express  no  such  opinion. An audit also includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements,  assessing  the  accounting  principles  used  and
significant  estimates made by the management, as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion, the financial statements referred above present fairly, in all
material  respects,  the  financial  position of Entelagent Software Corp. as of
December  31,  2004 and the results of its operations and its cash flows for the
years ended December 31, 2004 and 2003, in conformity with accounting principles
generally  accepted  in  the  United  States  of  America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 2 to the
financial  statements,  the Company has had recurring losses since its inception
and  has  a working capital deficiency as of December 31, 2004. These conditions
raise  substantial  doubt  about  its  ability  to  continue as a going concern.
Management's  plans  regarding  those  matters also are described in Note 2. The
financial  statements  do not include any adjustments that might result from the
outcome  of  this  uncertainty.

                                                       /s/ Marcum & Kliegman LLP

October  28,  2005
New  York,  New  York


                                       58



                                                                 ENTELAGENT SOFTWARE CORP.

                                                                             BALANCE SHEET

                                                                         December 31, 2004
------------------------------------------------------------------------------------------


                                   ASSETS
                                   ------

CURRENT ASSETS
--------------
                                                                        

  Cash                                                          $     9,750 
  Accounts receivable, net                                          106,832 
                                                                ------------

    Total Current Assets                                                      $   116,582 

PROPERTY AND EQUIPMENT, Net                                                           694 
-----------------------

SECURITY DEPOSIT                                                                    5,000 
----------------

TECHNOLOGY LICENSE                                                                802,500 
------------------                                                            ------------

    TOTAL ASSETS                                                              $   924,776 
                                                                              ------------


                                       59

                                                                 ENTELAGENT SOFTWARE CORP.

                                                                             BALANCE SHEET

                                                                         December 31, 2004
------------------------------------------------------------------------------------------

                   LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                   ----------------------------------------

CURRENT LIABILITIES
-------------------
  Accounts payable                                              $   496,394 
  Accrued payroll                                                 1,678,533 
  Payroll taxes payable                                             530,923 
  Deferred revenue                                                  119,455 
  Accrued interest, including $426,251 due to related parties       664,065 
  Accrued expenses                                                   74,181 
  Accrued technology license fees                                   450,000 
  Advances from prospective acquirer                                943,241 
  Advances from prospective affiliate                               788,270 
  Amounts due to officers and stockholders                          962,520 
  Notes payable                                                     542,414 
                                                                ------------

      Total Current Liabilities                                               $ 7,249,996 

MANDATORILY REDEEMABLE CONVERTIBLE
----------------------------------
  PREFERRED STOCK
  ---------------
    Series A (Liquidation preference $192,500)                      192,500 
    Series B (Liquidation preference $600,000)                      600,000 
    Series C (Liquidation preference $1,610,448)                  1,610,448 
                                                                ------------

      Total Long-Term Liabilities                                               2,402,948 
                                                                              ------------

      TOTAL LIABILITIES                                                         9,652,944 

COMMITMENTS AND CONTINGENCIES
-----------------------------

STOCKHOLDERS' DEFICIENCY
------------------------
  Common stock, par value $.01 per share, 10,000,000 shares
    authorized; 3,278,900 shares issued and outstanding              32,789 
  Additional paid-in capital                                        748,999 
  Accumulated deficit                                            (9,509,956)
                                                                ------------

      TOTAL STOCKHOLDERS' DEFICIENCY                                           (8,728,168)
                                                                              ------------

      TOTAL LIABILITIES AND STOCKHOLDERS'
        DEFICIENCY                                                            $   924,776 
                                                                              ------------


       The accompanying notes are an integral part of these financial statements


                                       60



                                                       ENTELAGENT SOFTWARE CORP.

                                                        STATEMENTS OF OPERATIONS

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                 2004          2003
                                             --------------------------
                                                     
REVENUE                                      $   538,539   $ 1,186,937 
-------

COST OF REVENUE                                  100,214       170,859 
---------------                              ------------  ------------

    GROSS MARGIN                                 438,325     1,016,078 
                                             ------------  ------------

OPERATING EXPENSES
------------------
  Payroll and related expenses                   855,134     1,629,744 
  Legal and professional fees                     22,440        93,477 
  Consulting fees - related party                 10,000       120,000 
  Other general and administrative expenses      243,239       267,141 
                                             ------------  ------------

    TOTAL OPERATING EXPENSES                   1,130,813     2,110,362 
                                             ------------  ------------

    OPERATING LOSS                              (692,488)   (1,094,284)

OTHER EXPENSE
-------------
  Interest expense, including $118,804 and
    $113,424 to related parties during the
    years ended December 31, 2004 and 
    2003, respectively                          (333,027)     (396,036)
                                             ------------  ------------

    LOSS BEFORE  INCOME TAXES                 (1,025,515)   (1,490,320)

INCOME TAXES                                          --            -- 
------------                                 ------------  ------------

    NET LOSS                                 $(1,025,515)  $(1,490,320)
                                             ============  ============


       The accompanying notes are an integral part of these financial statements


                                       61



                                                                                                ENTELAGENT SOFTWARE CORP.

                                                                                   STATEMENTS OF STOCKHOLDERS' DEFICIENCY

                                                                           For the Years Ended December 31, 2004 and 2003
-------------------------------------------------------------------------------------------------------------------------


                                       Common Stock           Additional
                               ---------------------------     Paid in        Deferred       Accumulated
                                  Shares       Par Value       Capital      Compensation       Deficit         Total
-------------------------------------------------------------------------------------------------------------------------
                                                                                         

BALANCE - January 1, 2003         3,278,900  $      32,789  $     748,999  $      (7,085)  $  (6,994,121)  $  (6,219,418)
-------

  Amortization of stock-based
    deferred compensation                --             --             --          5,010              --           5,010 

  Net loss                               --             --             --             --      (1,490,320)     (1,490,320)
                               ------------  -------------  -------------  --------------  --------------  --------------

BALANCE - December 31, 2003       3,278,900         32,789        748,999         (2,075)     (8,484,441)     (7,704,728)
-------

  Amortization of stock-based
    deferred compensation                --             --             --          2,075              --           2,075 

  Net loss                               --             --             --             --      (1,025,515)     (1,025,515)
                               ------------  -------------  -------------  --------------  --------------  --------------

BALANCE - December 31, 2004       3,278,900  $      32,789  $     748,999  $          --   $  (9,509,956)  $  (8,728,168)
-------                        ============  =============  =============  ==============  ==============  ==============


       The accompanying notes are an integral part of these financial statements


                                       62



                                                          ENTELAGENT SOFTWARE, INC.

                                                           STATEMENTS OF CASH FLOWS

                                     For the Years Ended December 31, 2004 and 2003
-----------------------------------------------------------------------------------


                                                              2004          2003
                                                         --------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
------------------------------------
                                                                 
  Net loss                                               $(1,025,515)  $(1,490,320)
                                                         ------------  ------------
  Adjustments to reconcile net loss to net cash used in
    operating activities:
      Depreciation and amortization                           11,539        21,001 
      Deferred financing costs                                 2,916         1,029 
      Amortization of deferred stock-based compensation        2,075         5,010 
      Bad debt expense                                        39,772        10,000 
  Changes in operating assets and liabilities:
      Accounts receivable                                   (105,585)      574,976 
      Other assets                                            25,535       (11,059)
      Accounts payable                                       (59,222)      145,924 
      Accrued expenses                                        12,247        13,300 
      Accrued compensation                                   393,828       736,230 
      Accrued interest                                       327,494       303,959 
      Deferred revenue                                       (55,115)     (418,715)
      Consulting agreement payable                            10,000        90,000 
                                                         ------------  ------------

        TOTAL ADJUSTMENTS                                    605,484     1,471,655 
                                                         ------------  ------------

        NET CASH USED IN OPERATING ACTIVITIES               (420,031)      (18,665)
                                                         ------------  ------------

CASH FLOWS FROM INVESTING ACTIVITIES
------------------------------------
  Purchase and development of licensed technology           (352,500)           -- 
  Additions to fixed assets                                       --        (1,659)
                                                         ------------  ------------

        NET CASH USED IN INVESTING ACTIVITIES            $  (352,500)  $    (1,659)
                                                         ------------  ------------


       The accompanying notes are an integral part of these financial statements


                                       63



                                                       ENTELAGENT SOFTWARE, INC.

                                             STATEMENTS OF CASH FLOWS, Continued

                                  For the Years Ended December 31, 2004 and 2003
--------------------------------------------------------------------------------


                                                        2004      2003
                                                    ---------------------

CASH FLOWS FROM FINANCING ACTIVITIES
------------------------------------
                                                         

  Advances made by officers and stockholders        $ 10,524   $  11,763 
  Advances from prospective acquirer                  24,500     490,000 
  Advances from prospective affiliate                777,840          -- 
  Note payable advance                                    --       2,000 
  Reductions in capital lease obligations             (9,128)    (12,205)
  Repayments to officers and stockholders            (22,730)   (107,500)
  Repayment of factoring arrangement                      --    (392,997)
                                                    ---------  ----------

      NET CASH PROVIDED BY (USED IN)
        FINANCING ACTIVITIES                         781,006      (8,939)
                                                    ---------  ----------

      NET INCREASE (DECREASE) IN CASH                  8,475     (29,263)

CASH - Beginning of Period                             1,275      30,538 
----                                                ---------  ----------

CASH - End of Period                                $  9,750   $   1,275 
----                                                ---------  ----------


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
--------------------------------------------------
  Cash paid during the years for:

    Interest                                        $    483   $  91,048 
    Income taxes                                    $     --   $      -- 


       The accompanying notes are an integral part of these financial statements


                                       64

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  1  -  The  Company
            ------------

     Organization
     ------------
     Entelagent  Software  Corp.  (the  "Company")  is  a California corporation
     formed  in 1996. The Company is a provider of e-mail monitoring and archive
     software  solutions  designed  to protect enterprises that use the Internet
     for  electronic  commerce  and  secure  communications.


NOTE  2  -  Liquidity  and  Financial  Condition
            ------------------------------------

     The  accompanying financial statements have been prepared assuming that the
     Company  will  continue  as  a  going  concern,  which  contemplates  the
     realization  of  assets  and  the satisfaction of liabilities in the normal
     course  of  business.  The  Company  has  had  recurring  losses  since its
     inception.  At  December 31, 2004, the Company's working capital deficiency
     amounted  to $7,133,414 and its accumulated deficit amounted to $9,509,956.
     On March 30, 2005, the Company entered into an Agreement and Plan of Merger
     with  Patron  Systems  Inc.  ("Patron") (Note 17). The Company will require
     substantial  additional  working  capital  to sustain its operations, while
     Patron  will  continue  its  efforts  to  integrate  the  business into its
     existing  operations.

     The Company expects to continue incurring losses for the foreseeable future
     and  cannot  provide  any  assurance  as to when, if ever, it will become a
     profitable  enterprise  due  to the inherent uncertainty that is related to
     establishing  the  commercial  feasibility  of  technological  products and
     developing  a presence in new markets. Patron has limited capital resources
     and  is  subject  to  substantial  contingencies that raise doubt as to its
     ability  to  continue as a going concern. The Company's continued existence
     is  dependent  upon  the  ability of Patron to raise the additional capital
     that  it  needs to sustain its operations while it continues to execute its
     business  plan  and  settle its outstanding legal contingencies in a manner
     that  will  not  have  a  material  adverse  affect  on  the  Company.

     Patron  is  currently  in  the  process  of  attempting to raise additional
     capital  and  its  management  has  taken  certain  steps  to  conserve its
     liquidity,  while  it continues to integrate the Company and other acquired
     businesses into its existing operations. Neither Patron nor the Company has
     obtained  any  commitments to provide the Company with new financing. These
     matters  raise substantial doubt about the Company's ability to continue as
     a  going  concern.  The financial statements do not include any adjustments
     relating  to  the  recoverability  of  recorded asset amounts that might be
     necessary  as  a  result  of  the  above  uncertainty.


                                       65

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies
            ----------------------------------------------

     Revenue  Recognition
     --------------------
     The  Company  derives its revenues from the licensing of computer software,
     post  contract  customer  support  and  professional  consulting  services.

     The  Company recognizes revenue in accordance with accounting standards for
     software companies, including Statement of Position ("SOP") 97-2, "Software
     Revenue  Recognition," as amended by SOP 98-9, and related interpretations,
     including  Technical  Practice  Aids.  In December 1999, the Securities and
     Exchange  Commission  ("SEC") issued Staff Accounting Bulletin ("SAB") 101,
     "Revenue  Recognition  in Financial Statements." SAB 101 summarizes certain
     of  the SEC's views in applying generally accepted accounting principles to
     revenue  recognition  in  financial  statements.

     Revenues  from  software  license  agreements are generally recognized upon
     delivery  of  software to the customer. All of the Company's software sales
     are supported by a written contract or other evidence of a sale transaction
     such as a customer purchase order. These forms of evidence clearly indicate
     the selling price to the customer, shipping terms, payment terms and refund
     policy,  if any. The selling prices of these products are fixed at the time
     the  sale  is  consummated.

     Revenue  from  post  contract  customer support arrangements or undelivered
     elements  are  deferred  and recognized at the time of delivery or over the
     period  in  which  the  services  are  performed  based  on vendor specific
     objective  evidence  of  fair  value  for such undelivered elements. Vendor
     specific objective evidence is typically based on the price charged when an
     element  is  sold  separately, or, if an element is not sold separately, on
     the  price  established  by  an  authorized  level  of management, if it is
     probable  that  the  price, once established, will not change before market
     introduction.  The  Company uses the residual method prescribed in SOP 98-9
     to  allocate  revenue  to  delivered  elements  once  it  has  established
     vendor-specific  evidence  for  such  undelivered  elements.

     Professional consulting services are billed based on the number of hours of
     consulting  services  provided  and  the  hourly billing rates. The Company
     recognizes  revenue  under  these arrangements as the service is performed.

     Accounts  Receivable
     --------------------
     Accounts  receivable  have  been  adjusted  for  all  known  uncollectible
     accounts.  The  allowance  for  doubtful  accounts  is  the  Company's best
     estimate  of the amount of probable credit losses in the Company's existing
     accounts  receivable.  The  Company  reviews  its  allowance  for  doubtful
     accounts  on  a  monthly  basis  and  determines  the allowance based on an
     analysis  of  its past due accounts. All past due balances that are over 90
     days  are  reviewed  individually  for collectibility. Account balances are
     charged  off  against the allowance after all means of collection have been
     exhausted  and  the  potential  for  recovery  is  considered  remote.


                                       66

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies,  continued
            ----------------------------------------------

     Property  and  Equipment
     ------------------------
     Property  and equipment is stated at cost, net of accumulated depreciation.
     Depreciation  is computed using the straight-line method over the estimated
     useful lives of the assets, which is generally three years. Maintenance and
     repairs  are  expensed as incurred. When property and equipment is sold, or
     otherwise  disposed  of,  the cost and related accumulated depreciation are
     eliminated  from  the  accounts  and  any  resulting  gains  or  losses are
     reflected  in  the  statement  of  operations  in  the  period of disposal.

     Software  Development  Costs
     ----------------------------
     In  accordance with Statement of Financial Accounting Standard ("SFAS") No.
     86,  "Accounting  for  the Costs of Computer Software to be Sold, Leased or
     Otherwise  Marketed," software development costs incurred subsequent to the
     establishment  of  technological  feasibility through the product's general
     availability  are  capitalized.  The  Company  also capitalizes the cost of
     improvements to its existing products that extend the life or significantly
     improve  the  marketability  of  the original product and enhancements that
     require  a  redesign  of  all  or  part  of the existing product. Any costs
     incurred  prior  to  the  time  in which the technological feasibility of a
     product  is  established  are  expensed  as  research  and  development.

     The  Company  did not incur any capitalizable software development costs or
     research  and  development  expenses  with  respect to internal development
     activities  during  the  years  ended  December  31,  2004  and  2003.

     Amortization  of  software  development  costs  commences  when the related
     products  become  available for general release to customers at the greater
     of the amount computed using (a) the ratio that current gross revenue for a
     product  bears  to the total of current and anticipated future revenues for
     that  product, or (b) the straight-line method over the remaining estimated
     economic  life  of  the  product.

     In December 2004, the Company purchased from a third party, a non-exclusive
     perpetual license to certain software technology (Note 6). Such software is
     designed  to  work  in  conjunction  with  the  Company's  existing  e-mail
     surveillance  products.  The  third  party has also been engaged to further
     enhance  the  product  under  a  development  contract  that  is more fully
     described  in  Note  6.  The  Company  capitalized $802,500 of costs, which
     includes $750,000 for the license and $52,500 of payments made to the third
     party  vendor  for  further development work. Management estimates that the
     useful  life  of  the  product  is  five  years  beginning January 1, 2005.
     Accordingly,  the  Company  did not record any amortization with respect to
     these  costs  for  the  year  ended  December  31,  2004.


                                       67

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies,  continued
            ----------------------------------------------

     Impairment  of  Long-Lived  Assets
     ----------------------------------
     The  Company  evaluates  its  long-lived  assets  for  possible  impairment
     whenever  events  or  changes  in  circumstances indicate that the carrying
     amount  of  an  asset  may  not  be recoverable. When evaluating assets for
     potential impairment, the Company first compares the carrying amount of the
     asset  to  the  asset's  estimated future cash flows (undiscounted and with
     interest charges). If the estimated future cash flows used in this analysis
     are  less  than  the  carrying  amount  of  the  assets, an impairment loss
     calculation  is  prepared.  The  impairment  loss  calculation compares the
     carrying  amount  of  the  asset to the asset's estimated future cash flows
     (discounted  and with interest charges). If the carrying amount exceeds the
     asset's estimated future cash flows (discounted and with interest charges),
     the  loss  is allocated to the long-lived assets of the group on a pro rata
     basis  using the relative carrying amounts of those assets. The Company did
     not  consider  it  necessary to record any impairment charges for the years
     ended  December  31,  2004  of  2003.

     Income  Taxes
     -------------
     The  Company  accounts  for  income  taxes  under  Statement  of  Financial
     Accounting  Standards  No.  109,  "Accounting  for Income Taxes" ("SFAS No.
     109").  SFAS  No.  109  requires the recognition of deferred tax assets and
     liabilities  for  both  the  expected  impact  of  differences  between the
     financial  statements  and  tax basis of assets and liabilities and for the
     expected  future  tax  benefit  to  be derived from tax loss and tax credit
     carry  forwards.  SFAS No. 109 additionally requires the establishment of a
     valuation  allowance  to  reflect the likelihood of realization of deferred
     tax  assets.

     Stock-Based Compensation
     ------------------------
     As permitted under SFAS No. 148, "Accounting for Stock-Based Compensation -
     Transition  and  Disclosure,"  which  amended SFAS No. 123, "Accounting for
     Stock-Based  Compensation,"  the  Company has elected to continue to follow
     the  intrinsic  value method in accounting for its stock-based compensation
     arrangements  as defined by Accounting Principles Board ("APB") Opinion No.
     25,  "Accounting for Stock Issued to Employees," ("APB No. 25") and related
     interpretations  including  Financial  Accounting  Standards Board ("FASB")
     Interpretation No. 44, "Accounting for Certain Transactions Involving Stock
     Compensation,"  an  interpretation  of  APB  No.  25.


                                       68

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies,  continued
            ----------------------------------------------

     The  following  table  summarizes  the  proforma  operating  results of the
     Company  had  compensation  expense  for stock options granted to employees
     been  determined  in  accordance  with  the  fair market value based method
     prescribed  by  SFAS  No.  123.  The  Company  has  presented the following
     disclosures  in  accordance  with  SFAS  No.  148.



                                                          For the Years Ended
                                                              December 31,
                                                       --------------------------
                                                           2004          2003
                                                       --------------------------
                                                               
     Net loss, as reported                             $(1,025,515)  $(1,490,320)
                                                       ------------  ------------
     Add:   stock-based compensation cost included in
              the financial statements                          --            -- 
     Less:  stock-based employee compensation cost
              under the fair value method of SFAS
              No. 123                                       43,796       120,242 
                                                       ------------  ------------

            Proforma Net Loss                          $(1,069,311)  $(1,610,562)
                                                       ============  ============


     The  following  proforma information regarding stock-based compensation has
     been  determined  as  if  the  Company had accounted for its employee stock
     option  shares  under  the  fair  market value method of SFAS 123. The fair
     value  of  the  employee  stock  options was estimated at the date of grant
     using  the  Black-Scholes  pricing  model.

     No  options were granted during the years ended December 31, 2004 and 2003.

     Non-Employee Stock-Based Compensation
     -------------------------------------
     The  cost  of  stock-based  compensation awards issued to non-employees for
     services  is recorded at either the fair value of the services rendered, or
     the  instruments  issued  in  exchange for such services, whichever is more
     readily  determinable,  using the measurement date guidelines enumerated in
     Emerging  Issues  Task  Force  Issue ("EITF") 96-18, "Accounting for Equity
     Instruments  That  Are  Issued to Other Than Employees for Acquiring, or in
     Conjunction  with  Selling,  Goods  or  Services."

     Common Stock Purchase Warrants
     ------------------------------
     The  Company  accounts  for  the issuance of common stock purchase warrants
     issued  with  registration rights in accordance with the provisions of EITF
     00-19,  "Accounting  for  Derivative  Financial Instruments Indexed to, and
     Potentially  Settled  in,  a  Company's  Own  Stock."

     Based on the provisions of EITF 00-19, the Company classifies as equity any
     contracts  that (i) require physical settlement or net-share settlement, or
     (ii) give the Company a choice of net-cash settlement, or settlement in its
     own  shares  (physical  settlement  or  net-share  settlement). The Company
     classifies as assets or liabilities any contracts that (i) require net-cash
     settlement  (including  a requirement to net cash settle the contract if an
     event  occurs  and if that event is outside the control of the Company), or
     (ii) give the counterparty a choice of net-cash settlement or settlement in
     shares  (physical  settlement  or  net-share  settlement).


                                       69

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies,  continued
            ----------------------------------------------

     Use of Estimates in Preparing Financial Statements
     --------------------------------------------------
     In  preparing financial statements in conformity with accounting principles
     generally  accepted in the United States of America, management is required
     to  make  estimates  and  assumptions  that  affect the reported amounts of
     assets  and  liabilities  and  the  disclosure  of  contingent  assets  and
     liabilities  at  the  date  of  the  financial  statements  and revenue and
     expenses  during  the  reporting  period.  Actual results could differ from
     those  estimates.

     Fair  Value  of  Financial  Instruments
     ---------------------------------------
     The  Company's  financial  instruments  consist  primarily  of  accounts
     receivable,  accounts payable, accrued expenses, accrued interest, debt and
     preferred  stock  redeemable  during the next year's approximate fair value
     because  of  their  short-maturities. The carrying amounts of the Company's
     demand notes, advances from prospective acquirer and affiliate and advances
     from  officers  and shareholders approximate fair value as such instruments
     feature  contractual interest rates that are consistent with current market
     rates  of  interest  or  have  effective  yields  that  are consistent with
     instruments  of  similar  risk, when taken together with equity instruments
     issued  to  the  holder.

     Recently Issued Accounting Pronouncements
     -----------------------------------------
     In  January  2003, the FASB issued Interpretation No. 46, "Consolidation of
     Variable  Interest  Entities" ("FIN 46"). This interpretation of Accounting
     Research  Bulletin  No.  51,  "Financial Statements," provides guidance for
     identifying  a  controlling  interest in a variable interest entity ("VIE")
     established  by  means  other  than  voting  interest. FIN 46 also required
     consolidation  of  a  VIE  by  an  enterprise  that  holds such controlling
     interest.  In December 2003, the FASB completed its deliberations regarding
     the  proposed modifications to FIN 46 and issued Interpretation Number 46R,
     "Consolidation of Variable Interest Entities - an Interpretation of ARB 51"
     ("FIN  46R").  The  decisions  reached included a deferral of the effective
     date  and  provisions  for additional scope exceptions for certain types of
     variable  interests.  Application  of  FIN  46R  is  required  in financial
     statements of public entities that have interests in VIEs or potential VIEs
     commonly  referred  to as special-purpose entities for periods ending after
     December  15,  2003.  Application by privately held entities is required in
     annual  financial statements for periods beginning after December 15, 2004.
     The  adoption of this pronouncement is not expected to have material effect
     on  the  Company's  financial  statements.


                                       70

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  3  -  Summary  of  Significant  Accounting  Policies,  continued
            ----------------------------------------------

     Recently Issued Accounting Pronouncements, continued
     -----------------------------------------
     In  December  2004,  the  FASB issued SFAS No. 123R, "Share Based Payment".
     This  statement  is  a  revision of SFAS Statement No. 123, "Accounting for
     Stock-Based  Compensation,"  and supersedes APB Opinion No. 25, "Accounting
     for  Stock  Issued  to Employees," and its related implementation guidance.
     SFAS  123R  addresses  all  forms  of  share-based  payment ("SBP") awards,
     including shares issued under employee stock purchase plans, stock options,
     restricted stock and stock appreciation rights. Under SFAS 123R, SBP awards
     result  in  a cost that will be measured at fair value on the awards' grant
     date, based on the estimated number of awards that are expected to vest and
     will result in a charge to operations for stock-based compensation expense.
     The  charge  will  be  reflected  in the Company's Statements of Operations
     during periods, in which such charges are recorded, but will not affect its
     Balance  Sheets  or  Statements  of  Cash Flows. SFAS 123R is effective for
     public  entities  that file as small business issuers - as of the beginning
     of  the  first  interim  or annual reporting period of the fiscal year that
     begins  after December 15, 2005. The Company is currently in the process of
     evaluating  the effect that the adoption of this pronouncement will have on
     its  financial  statements.

     In  December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
     Assets".  SFAS 153 amends APB Opinion No. 29 to eliminate the exception for
     non-monetary  exchanges of similar productive assets and replaces it with a
     general  exception  for  exchanges  of non-monetary assets that do not have
     commercial  substance.  A non-monetary exchange has commercial substance if
     the future cash flows of the entity are expected to change significantly as
     a  result  of  the  exchange.  The provisions of SFAS 153 are effective for
     non-monetary  asset  exchanges  occurring in fiscal periods beginning after
     June  15,  2005.  Earlier  application  is permitted for non-monetary asset
     exchanges  occurring  in  fiscal periods beginning after December 16, 2004.
     The  provisions of this statement are intended to be applied prospectively.
     The  adoption  of  this  pronouncement  is  not expected to have a material
     effect  on  the  Company's  financial  statements.


NOTE  4  -  Accounts  Receivable
            --------------------

     Accounts  receivable  at  December  31,  2004  consist  of  the  following:



                                                        Amount
                                                       ---------
                                                    
               Accounts receivable                     $156,604 
               Less:  allowance for doubtful accounts   (49,772)
                                                       ---------

                        Accounts Receivable, Net       $106,832 
                                                       =========



                                       71

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  5  -  Property  and  Equipment
            ------------------------

     Property  and  equipment  at  December  31, 2004 consists of the following:



                                                       Amount
                                                     ----------
                                                  
               Office furniture                      $   9,160 
               Computers                                69,098 
               Communications system                    35,995 
                                                     ----------
                                                       114,253 
               Less:  accumulated depreciation        (113,559)
                                                     ----------

                        Property and Equipment, Net  $     694 
                                                     ==========


     Depreciation  expense  for  the  years  ended  December  31,  2004 and 2003
     amounted  to  $11,539  and  $21,001,  respectively.


NOTE  6  -  Technology  License,  Development  and  Joint  Sales  Agreement
            ---------------------------------------------------------------
            with encryptX Corporation
            -------------------------

     On  December 29, 2004, the Company entered into an agreement to license and
     resell  encryptX  Corporation's  ("encryptX")  technology  for  a  fee  of
     $750,000.  Such  license provides the Company with a non-exclusive right to
     market  and  sell  encryptX's  "BeCompliant" technology via its integration
     into Entelagent's messaging platform. Revenues generated from cross-selling
     this  product  will  be  shared  in  accordance  with  the  revenue sharing
     provisions  of  the agreement. Upon execution of the license agreement, the
     Company  made  an  initial  payment to encryptX of $300,000 and accrued the
     remaining $450,000. Patron assumed the liability for the remaining payments
     due  to  encryptX  upon  its  acquisition  of  the  Company  (Note  17).

     The  Company  also  engaged  encryptX  to  make further enhancements to the
     product  in  order to increase its usefulness, for an aggregate development
     fee  of  $157,500,  payable  in  six monthly installments of $26,250. As of
     December  31,  2004,  the  Company  made  two  payments  to encryptX in the
     aggregate  amount  $52,500,  with  respect to the development services. The
     remaining  payments, which amounted to $105,000, plus an additional $17,534
     for  additional  consulting  work,  were  made  by  Patron  following  its
     acquisition  of  the  Company  in  February  2005  (Note  17).


                                       72

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  7  -  Payroll  Taxes  Payable
            -----------------------

     Payroll  taxes  payable  includes $348,828 of federal income taxes withheld
     from  certain  current and former employees of the Company retroactively to
     2001,  plus  $182,095  in  estimated  penalties  and  interest. The Company
     determined  that such amounts were due upon an evaluation of its previously
     filed  payroll  tax  returns  that were found to include understatements of
     reported  amounts.  The  Company  has  not  been  contacted by the Internal
     Revenue  Service  ("IRS")  with  respect to this matter, but is prepared to
     remit  the  amount  of  its  recorded  obligation.  The  Company  does  not
     anticipate  having to pay more than the recorded amount, however, there can
     be no assurance that the ultimate resolution of this matter will not result
     in the Company having to make a payment that could substantially exceed the
     amount  of  its  estimate.  Interest expense on this obligation amounted to
     $38,371  for  each  of  the  years  ended  December  31,  2004  and  2003.


NOTE 8 - Advances from Prospective Acquirer
         ----------------------------------

     Advances  due  to  Patron  include  $770,000  of  principal and $173,241 of
     interest  accrued  at  the  rate of 10% per annum. The advances made to the
     Company by Patron are payable on demand. Interest expense on these advances
     amounted  to  $77,211 and $66,622 for the years ended December 31, 2004 and
     2003, respectively. As described in Note 17, the Company merged into Patron
     on  March  30,  2005,  at  which  time  the  Company  became a wholly-owned
     subsidiary  of  Patron.


NOTE  9  -  Advances  from  Prospective  Affiliate
            --------------------------------------

     Advances due to Complete Security Solutions, Inc. ("CSSI") include $777,840
     of  principal and $10,430 of interest accrued at the rate of 10% per annum.
     The  advances  made  to  the  Company by CSSI are payable on demand and are
     secured  by  all  the  current  and  future assets of the Company. Interest
     expense  on these advances amounted to $10,430 and $-0- for the years ended
     December  31,  2004  and  2003,  respectively.  CSSI  merged into Patron on
     February  25,  2005, at which time CSSI became a wholly-owned subsidiary of
     Patron  and  an  affiliate  of  the  Company  by  common  ownership.


NOTE  10  -  Amounts  Due  to  Officers  and  Stockholders
             ---------------------------------------------

     Amounts due to officers and stockholders include:



                                                                     
     Loans payable                                                      $651,270
     Expense reimbursements                                              153,194
     Accrued consulting fees                                             158,056
                                                                        --------

                                                                        $962,520
                                                                        ========



                                       73

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  10  -  Amounts  Due  to  Officers  and  Shareholders,  continued
             ---------------------------------------------

     Loans  Payable  to  Officers  and  Stockholders
     -----------------------------------------------
     Throughout  its  operating  history,  former  officers (during the terms of
     their  employment),  current  officers  and  certain  stockholders  of  the
     Company,  have  provided  financing  to the Company for its working capital
     needs.  In certain cases, these individuals made payments directly to third
     parties  to  assist the Company with covering its operating expenses during
     times  that  its  liquidity was constrained. The remaining balance of these
     advances  amounted  to $651,270 as of December 31, 2004. These advances and
     notes,  accrued  interest  at various rates ranging from 8% to 24%, and the
     accrued  interest  amounted  to  $426,251 as of December 31, 2004. Interest
     expense  on  these  loans  amounted  to $118,804 and $113,424 for the years
     ended  December  31,  2004  and  2003,  respectively.

     Subsequent  to  December,  31,  2004,  as part of the merger with Patron on
     March  30, 2005, the Company entered into notes payable with these officers
     and  shareholders  to  be  repaid on or before February 28, 2006. The notes
     accrue  interest  at  a rate of 8% per annum and require quarterly interest
     payments  beginning  June  30,  2005.

     Expense  Reimbursements  to  Officers  and  Stockholders
     --------------------------------------------------------
     Certain  officers  and  stockholders  incurred  expenses  on  behalf of the
     Company,  which  are  to be reimbursed by the Company to these individuals.
     These  expenses  are  principally  for  travel  and  entertainment  and
     miscellaneous  other  business expenses. The amount due to be reimbursed to
     these  officers  and  stockholders  at  December  31,  2004  is  $153,194.

     Accrued  Consulting  Fees
     -------------------------
     In  August  2001,  the Company entered into an agreement with the Company's
     founder  upon  his  resignation and termination as Chief Executive Officer,
     whereby  the  Company  contracted  with this individual to have him provide
     certain  consulting  services  to the Company. As of December 31, 2004, the
     amount  of  accrued  and  unpaid consulting fees totaled $158,056. Upon his
     resignation  as  Chief Executive Officer, this individual remained Chairman
     of  the  Board  of  Directors.


NOTE 11 - Notes Payable
          -------------

     Notes  payable  include (a) a note payable to Lok Technologies, Inc. in the
     amount  of  $312,557 bearing interest at 15%, (b) a note payable to Liberty
     Information Management Solutions in the amount of $169,357 bearing interest
     at  16.5%,  and  (c)  an  aggregate of $60,500 payable to three individuals
     bearing  interest  from  10%  to  15%. The Company is in default of each of
     these  obligations  at  December 31, 2004. Accordingly, they are payable on
     demand  and  are  classified  as  a  current  liability in the accompanying
     balance  sheet.  Accrued interest on these notes amounted to $237,813 as of
     December 31, 2004 and is included as a component of accrued interest in the
     accompanying  balance  sheet.  Interest  expense on these notes amounted to
     $82,678  and  $85,542  for  the  years  ended  December  31, 2004 and 2003,
     respectively.


                                       74

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  12  -  Accounts  Receivable  Factoring  Arrangement
             --------------------------------------------

     The  Company  had  an  accounts  receivable  factoring  arrangement  with a
     financial institution providing for the sale, with recourse of up to 80% of
     eligible accounts receivable. The Company repaid the balance due under this
     arrangement,  which  amounted  to $392,997, which was terminated during the
     year  ended  December  31,  2003.


NOTE  13  -  Series  A,  Series  B  and  Series  C  Preferred  Stock
             -------------------------------------------------------

     Pursuant  to  the  Company's  restated  certificate  of  incorporation, the
     Company  is  authorized  to  issue  up  to  50,000  shares  of its Series A
     Convertible  $0.01 par value Preferred stock ("Series A Preferred"), 15,000
     shares of its Series B Convertible $0.01 par value Preferred stock ("Series
     B  Preferred"),  and  100,000  shares of its Series C Convertible $0.01 par
     value  Preferred  stock  ("Series  C  Preferred").

     As  of  December  31,  2004,  the  Company has outstanding 19,250 shares of
     Series  A  Preferred, 12,000 shares of Series B Preferred and 20,277 shares
     of  Series  C  Preferred.  In  addition, the Company issued to investors of
     6,286  of  the Series C Preferred shares, warrants to purchase up to 29,900
     shares  of  the  Company's  common  stock ("Warrants"). The Warrants have a
     five-year  term  expiring  December 28, 2005 and an exercise price of $3.18
     per  share.  The  aggregate  fair  value of the Warrants, which amounted to
     approximately $23,000, was accreted as interest expense to January 1, 2002,
     the  earliest  date  of  redemption  of  the  Series  C  Preferred.

     The  Series A Preferred is convertible into common stock at any time at the
     option  of  the  holder,  based  on a formula which results in a 44.14-to-1
     exchange  ratio  of  common  stock  for  Series  A  Preferred. The Series B
     Preferred  is  convertible  into common stock at any time, at the option of
     the holder, based on a formula which results in a 25 to 1 exchange ratio of
     common  stock for Series B Preferred. The Series C Preferred is convertible
     into common stock, at the option of the holder, based on a formula equal to
     the  original  Series  C  Preferred issuance price ("Original Issue Price")
     divided  by  25  multiplied by the number of Series C Preferred shares. The
     formula  for  each  of  the  three  preferred  stock  series  is subject to
     adjustment  for  stock splits, stock dividends, recapitalizations, dilutive
     issuances  and  other  anti-dilution  provisions.  The  shares  of Series A
     Preferred,  Series B Preferred and Series C Preferred convert automatically
     into  shares  of  common  stock  immediately upon the sale of common stock,
     pursuant to a registration statement under the Securities Act of 1933 where
     the  aggregate  cash  proceeds  in  such offering are at least $10,000,000.

     The  Company has reserved 1,655,350 shares of its common stock for issuance
     upon  the  conversion  of  its  redeemable  convertible  preferred  stock.


                                       75

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  13  -  Series  A,  Series  B  and  Series  C  Preferred  Stock,  continued
             -------------------------------------------------------

     In  the event of any liquidation, dissolution or winding up of the Company,
     the  assets of the Company available for distribution to shareholders would
     be  distributed  among  the  holders  of  the  Series A Preferred, Series B
     Preferred  and  Series  C  Preferred and common stock pro rata based on the
     number  of  shares  of  common  stock  held  by  each,  determined  on  an
     as-converted  basis  (assuming  conversion  of all such Series A Preferred,
     Series  B  Preferred and Series C Preferred) determined as follows: (i) the
     initial  Series  A  Liquidation Preference amount is $10.00 per share; (ii)
     the initial Series B Liquidation Preference amount is $50.00 per share; and
     (iii)  the  initial  Series C Liquidation Preference amount is the Original
     Issue  Price  for each share. The holders of Series C Preferred would first
     receive no less than an amount equal to the Series C Liquidation Preference
     amount  for  each  share  of  Series C Preferred stock (as adjusted for any
     stock  splits,  stock  dividends  or  recapitalizations  of  the  Series  C
     Preferred  stock)  before distributions are made to the holders of Series B
     Preferred  stock.

     The holders of Series B Preferred would next receive no less than an amount
     equal  to  the  Series  B  Liquidation  Preference amount for each share of
     Series B Preferred stock (as adjusted for any stock splits, stock dividends
     or  recapitalizations of the Series B Preferred stock) before distributions
     are  made to the holders of Series A Preferred stock. The holders of Series
     A Preferred would next receive no less than an amount equal to the Series A
     Liquidation  Preference  amount  for each share of Series A Preferred stock
     (as  adjusted for any stock splits, stock dividends or recapitalizations of
     the  Series A Preferred stock) before distributions are made to the holders
     of  the  Company's  common  stock.

     The  holders  of the Series C Preferred and the Series B Preferred are also
     entitled  to  receive pari passu non-cumulative cash dividends, when and as
     declared, in preference to any dividends declared on the Series A Preferred
     and  on  the  common  stock  of  the  Company.

     One  or  more  holders  of shares of the Series A Preferred can require the
     Company  at  any  time  after  January  1,  1998  to  redeem their Series A
     Preferred  shares  (as  adjusted  for  any stock dividends, combinations or
     splits  with respect to such shares) at the Series A Liquidation Preference
     amount,  plus  accrued  but  unpaid  dividends.  Redemption  payments,  if
     demanded,  would  be  payable,  at  the  Company's  option, in twelve equal
     quarterly  installments,  commencing  on  October  31,  2002, following the
     Company's  receipt  of  a  redemption notice by the holders of the Series A
     Preferred.

     One  or  more  holders  of shares of the Series B Preferred can require the
     Company  at  any  time  after  January  31,  2000  to redeem their Series B
     Preferred  shares  (as  adjusted  for  any stock dividends, combinations or
     splits  with respect to such shares) at the Series B Liquidation Preference
     amount,  plus  accrued  but  unpaid  dividends.  Redemption  payments,  if
     demanded,  would  be  payable,  at  the  Company's  option, in twelve equal
     quarterly  installments,  commencing  on  January  1,  2003,  following the
     Company's  receipt  of  a  redemption notice by the holders of the Series B
     Preferred.


                                       76

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE  13  -  Series  A,  Series  B  and  Series  C  Preferred  Stock,  continued
             -------------------------------------------------------

     One  or  more  holders  of shares of the Series C Preferred can require the
     Company  at  any  time  after  January  31,  2002  to redeem their Series C
     Preferred  shares  (as  adjusted  for  any stock dividends, combinations or
     splits  with respect to such shares) at the Series C Liquidation Preference
     amount,  plus  accrued  but  unpaid  dividends.  Redemption  payments,  if
     demanded,  would  be  payable,  at  the  Company's  option, in twelve equal
     quarterly  installments,  commencing  on  January  1,  2005,  following the
     Company's  receipt  of  a  redemption notice by the holders of the Series C
     Preferred.

     Holders  of each share of Series A Preferred, Series B Preferred and Series
     C Preferred have the right to one vote for each share of Common Stock, into
     which  such  holders'  shares of Series A Preferred, Series B Preferred and
     Series  C  Preferred  could  then  be converted. As long as the Company has
     seven  or fewer authorized directors, the holders of Series A Preferred and
     Series  B Preferred are entitled, voting each as a separate class, to elect
     one  director  each  (for  a  total  of  two) to the Board of Directors. In
     addition,  for  as  long  as  the  Company  has  eight  or  more authorized
     directors,  the  holders  of  Series A Preferred and Series B Preferred are
     entitled, voting each as a separate class, to elect two directors each (for
     a  total  of  four)  to  the  Board  of  Directors.

     Holders  of each of the Series A Preferred, Series B Preferred and Series C
     Preferred  have the right to demand registration of the common stock of the
     Company  issued  or  issuable  for  their  preferred shares. The Company is
     required,  under  the  circumstances,  to use its best efforts to effect as
     soon as practicable the registration of the securities under the Securities
     Exchange  Act  of  1934

     The  Company  classified the Series A Preferred, the Series B Preferred and
     the Series C Preferred as liability instruments in the accompanying balance
     sheet  in  accordance  with  SFAS  150,  "Accounting  for Certain Financial
     Instruments  with  Characteristics  of  both Liabilities and Equity," since
     they  are  all  mandatorily  redeemable  at  the  option  of  the  holder.


NOTE 14 - Stockholders' Deficiency
          ------------------------

     Stock Options
     -------------
     The  Company's  1997  Stock  Incentive  Compensation  Plan  (the 1997 Plan)
     provides  for  the  grant  of  incentive  and nonqualified stock options to
     employees,  officers,  directors,  agents,  consultants  and  independent
     contractors.

     Options  under  the  Plan  are  granted at fair market value on the date of
     grant. The shares of common stock covered by options granted on the date of
     hire  generally  vest at the rate of 12.5% 6 months from the date of grant,
     and  an  additional  2.08% every month thereafter, with all shares becoming
     fully  vested  on the fourth anniversary date of the date of grant. Options
     granted  other than on the date of hire generally vest at the rate of 2.08%
     every  month,  commencing  one  month from the date of grant. The 1997 Plan
     provides  for  grants  with  terms up to ten years. Option grants typically
     have  a  term  of  five  years.


                                       77

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 14 - Stockholders' Deficiency, continued
          ------------------------



                                                      Weighted
                                        Options        Average        Options
                                         Shares    Exercise Price   Exercisable
                                       ----------------------------------------
                                                           
     Outstanding at December 31, 2002  1,174,564   $          2.07      815,911
       Granted                                -- 
       Cancellations and forfeitures     (71,916)             2.66
       Exercised                              -- 
                                       ----------

     Outstanding at December 31, 2003  1,102,648   $          2.03    1,021,507
       Granted                                -- 
       Cancellations and forfeitures    (197,250)             1.48
       Exercised                              -- 
                                       ----------

     Outstanding at December 31, 2004    905,398   $          2.15      898,120
                                       ==========


     The  weighted  average  remaining  contractual  life  and  weighted average
     exercise  price  of options outstanding and options exercisable at December
     31,  2004  under  all  of  the  Company's  stock  option plans for selected
     exercise  price  ranges  is  as  follows:



                                        Options Outstanding
                                          Weighted Average
                           Options           Remaining            Options
                         Outstanding      Contractual Life      Exercisable
      Exercise Price       Shares             (Years)             Shares
--------------------------------------------------------------------------------
                                                       
           $1.44           250,000              4.82              250,000
            2.00           379,150              1.00              379,150
            2.88           175,000              0.92              175,000
            3.18            70,000              1.53               62,722
            3.20            31,248              0.92               31,248


     Deferred Stock-Based Compensation
     ---------------------------------
     The Company uses the intrinsic value-based method to account for all of its
     employee  stock-based  compensation arrangements. The underlying fair value
     of  the  Company's  common  stock  did not exceed the exercise price of the
     stock  options at the date of grant and, therefore, no employee stock-based
     compensation  charges  were  recorded  in  2004  and  2003.

     Common Stock Purchase Warrants
     ------------------------------
     At  December  31,  2004, the Company had an aggregate of 57,138 outstanding
     common  stock  purchase  warrants.  Such  warrants  include  6,250  with an
     exercise  price  of  $2.00  per share and a remaining contractual life of 3
     months  and 50,888 with an exercise price of $3.18 per share and a weighted
     average  remaining contractual life of 14 months. The Company did not issue
     any common stock purchase warrants during the years ended December 31, 2004
     and  2003.


                                       78

                                                       ENTELAGENT SOFTWARE CORP.

                                                   NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------


NOTE 15 - Economic Dependency
          -------------------

     Major Customers
     ---------------
     During  the  year  ended  December  31,  2004,  revenues  from one customer
     amounted to $136,976, which is 25.4% of the Company's revenue for the year.

     During  the  year  ended  December  31,  2003,  revenues from two customers
     amounted  to  $444,500  and $141,060, which are 37.4% and 11.9% of revenues
     for  the  year,  respectively.


NOTE 16 - Income Taxes
          ------------

     At  December 31, 2004, the Company has incurred book losses totaling nearly
     $9.4  million  and,  as  a  result,  believes  that  it has substantial net
     operating loss carryforwards that may be available to offset future taxable
     income,  if  any,  through  2024.  The Company is currently delinquent with
     respect  to filing its Federal and State income tax returns and, therefore,
     has  not  quantified  the amounts or nature of its deferred tax assets. The
     Company  has  established  a  100% valuation allowance for the deferred tax
     assets  arising from the net operating loss and other temporary differences
     as  management believes that it is more likely than not that their benefit,
     if  any,  will  not  be  realized  in  the  future.

     The  utilization  of the net operating losses may be subject to substantial
     limitations  due  to the "change of ownership" provisions under Section 382
     of  the  Internal Revenue Code and similar state provisions, as a result of
     the  Company's  merger  with  Patron  Systems,  Inc.


NOTE  17  -  Subsequent  Events
             ------------------

     On February 24, 2005, Patron entered into a definitive Amended and Restated
     Supplemental  Agreement,  pursuant  to  which  Entelagent  Mergerco,  a
     wholly-owned  subsidiary  of Patron, would merge with and into the Company,
     with  the  Company  surviving  the  merger  as a wholly-owned subsidiary of
     Patron.  On  March  30,  2005,  pursuant  to  the  filing of an Amended and
     Restated  Agreement  and  Plan  of Merger, Patron's merger with the Company
     became  effective.


                                       79

     (b)  UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS.


Index of PRO FORMA FINANCIAL STATEMENTS
  Unaudited Pro Forma Condensed Consolidated Statements . . . . . . . . . . . 81
  Unaudited Pro Forma Condensed Consolidated Balance Sheet. . . . . . . . . . 82
  Unaudited Pro Forma Condensed Consolidated Statement of Operations. . . . . 83
  Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet at
      December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
  Notes to Unaudited Pro Forma Adjustments to Condensed Consolidated
      Statement of Operations - Year Ended  December 31, 2004 . . . . . . . . 86


                                       80

As described in Item 2.01 of the Form 8-K, effective February 25, 2005, Patron's
subsidiary CSSI Acquisition Co. I, Inc. consummated a merger with Complete
Security Solutions, Inc. ("CSSI") and Patron's subsidiary LL Acquisition I Corp.
consummated a merger with LucidLine, Inc. ("LucidLine"). On February 24,2005
CSSI consummated a merger with IDK Enterprises, Inc. Additionally, on March 30,
2005, Patron's subsidiary ESC Acquisition, Inc. consummated a merger with
Entelagent Software Corp. ("Entelagent").

The following unaudited pro forma condensed consolidated financial statements
(the "Pro Forma Financial Statements') of Patron Systems, Inc. (the "Company")
are derived from the Company's audited financial statements as of and for the
year ended December 31, 2004 and give effect to (1) the Company's mergers with
CSSI, LucidLine and Entelagent (the "Transactions") and (2) the issuance of
$3,500,000 of Bridge Financing notes with warrants sold to thirty-three
accredited investors introduced by Laidlaw & Company (UK) Ltd. ("Laidlaw").

The unaudited pro forma condensed consolidated balance sheet gives effect to the
Transactions as if they had occurred on December 31, 2004 and the unaudited pro
forma condensed consolidated statement of operations gives effect to the
Transactions as if they had occurred on January 1, 2004. The pro forma
adjustments are based upon available information and certain assumptions that
management believes are reasonable.

The unaudited Pro Forma Financial Statements are presented for informational
purposes only and do not purport to represent what the Company's financial
position or results of operations would have been as of the date or for the
period presented had the Transactions in fact occurred on such date or at the
beginning of the period indicated, or to project the Company's financial
position or results of operations for any future date or period. The Pro Forma
Financial Statements do not reflect any operating efficiencies, cost savings or
opportunities that the Company may achieve in combining the operations of the
merged businesses.  The Pro Forma Financial Statements are qualified by
reference to, and should be read in conjunction with , the Company's audited
financial statements included in its Annual Report on Form 10-KSB, filed with
the SEC on July 1, 2005.

The mergers are being accounted for as purchase business combinations.
Accordingly, the Company will establish a new basis of accounting for each of
the merged businesses by allocating their respective purchase prices (including
direct transaction costs), to the fair values of the assets acquired and
liabilities assumed as of the dates the mergers were consummated. A final
determination of the allocations of the purchase prices to the assets acquired
and liabilities assumed based on their respective fair values as of the dates of
the merges has not yet been completed. Accordingly, the purchase price
adjustments made in connection with the development of the Pro Forma Financial
Statements are preliminary and have been made solely for purposes of developing
such Pro Forma Financial Statements.


                                       81

The Company is performing a valuation study to determine the fair value of the
assets and liabilities of CSSI, LucidLine and Entelagent and will make
appropriate purchase accounting adjustments upon the completion of the valuation
study.



                                 UNAUDITED PROFORMA CONDENSED CONSOLIDATED BALANCE SHEET


                                                                            AT DECEMBER 31, 2004
                                                ------------------------------------------------------------------------
                                                                COMPLETE
                                                  PATRON        SECURITY          IDK                       ENTELAGENT
                                                  SYSTEMS,      SOLUTIONS,    ENTERPRISES,    LUCIDLINE      SOFTWARE
                                                    INC.           INC.           INC.           INC.       CORPORATION
                                                -------------  ------------  --------------  ------------  -------------
                                                                                            
Current Assets
  Cash and cash equivalents                     $     45,901   $ 1,447,885   $      22,497   $         -   $      9,750 


  Restricted cash                                          -             -               -             -              - 
  Accounts receivable, net                                 -             -         216,960        12,422        106,832 
  Other current assets                                 6,310        96,700           3,874         2,200              - 
                                                ------------------------------------------------------------------------
    sub-total current assets                          52,211     1,544,585         243,331        14,622        116,582 

Fixed assets, net                                          -             -          26,921        60,405            694 
Advances to acquired entities                        348,916     2,755,816                                              

Intangible assets
  Customer lists                                           -             -          22,500             -              - 
  Tradename and trademarks                                 -             -                             -              - 
  Technology                                               -             -         303,078             -        802,500 
  In-process R&D                                           -             -               -             -              - 
Goodwill                                                   -             -               -             -              - 
Deferred financing fees                                    -        85,167         121,900             -              - 

Other assets                                               -             -               -             -          5,000 
                                                ------------------------------------------------------------------------
  sub-total other assets                             348,916     2,840,983         474,399        60,405        808,194 
                                                ------------------------------------------------------------------------
Total Assets                                    $    401,127   $ 4,385,568   $     717,730   $    75,027   $    924,776 
                                                ========================================================================

Current Liabilities
  Accounts payable                              $  1,725,651   $         -   $      36,633   $    47,047   $    496,394 

  Cash overdraft                                           -             -               -           863              - 
  Loan interest payable                              277,169             -               -             -        664,065 
  Advances from acquired entity and affiliate              -             -         657,847       577,000      1,731,511 
  Accrued payroll taxes payable                            -             -               -             -        530,923 
  Accrued compensation and payroll                 2,100,778             -         143,408             -      1,678,533 
  Notes, loans and payables due to
   officers/shareholders                           1,565,898       100,000                        95,901        962,520 
  Deferred revenue                                         -             -         145,275             -        119,455 
  Convertible notes payable                                -             -               -             -              - 
  Bridge notes payable                                     -             -               -             -              - 
  Notes payable                                            -             -               -             -              - 
  Notes and commitments payable                      695,000             -               -             -        542,414 
  Accrued dividends                                        -        34,539         583,291             -              - 
  Current maturities of capital leases                     -             -               -         1,912              - 
  Accrued technology license fees                          -             -               -             -        450,000 
  Other current and accrued liabilities                    -        43,750          24,464             -         74,181 
                                                ------------------------------------------------------------------------
    sub-total current liabilities                  6,364,496       178,289       1,590,918       722,723      7,249,996 

Demand notes payable                               1,738,667             -               -             -              - 
Capital lease, net of current maturities                   -             -               -         4,401              - 

Preferred stock                                            -     3,877,219       4,358,769             -      2,402,948 
                                                ------------------------------------------------------------------------
  Total liabilities                                8,103,163     4,055,508       5,949,687       727,124      9,652,944 

Common stock subject to
  Put Right (2,000,000 shares)                     1,000,000             -               -             -              - 

Stockholders' Equity
  (Deficiency)
  Common stock                                       370,062        24,532               1       663,022         32,789 

  Additional paid in capital                      28,973,711       673,643       2,058,841             -        748,999 

  Warrants to be issued                                    -             -               -             -              - 

  Common stock to be issued                        4,671,400             -               -             -              - 
  Stock subscription receivable                            -       (24,532)              -             -              - 
  Common stock repurchase obligation              (1,300,000)            -               -             -              - 
  Deferred compensation                           (1,475,333)            -        (383,627)            -              - 
  Accumulated deficit                            (39,941,876)     (343,583)     (6,907,172)   (1,315,119)    (9,509,956)
                                                ------------------------------------------------------------------------
    Total Stockholders 'Equity (Deficiency)       (8,702,036)      330,060      (5,231,957)     (652,097)    (8,728,168)
                                                ------------------------------------------------------------------------
    Total Liabilities and
      Stockholders' Equity (Deficiency)         $    401,127   $ 4,385,568   $     717,730   $    75,027   $    924,776 
                                                ========================================================================


                                                  PRO FORMA             PRO FORMA
                                                 ADJUSTMENTS   NOTE:   CONSOLIDATED
                                                -------------  -----  --------------
                                                             
Current Assets
  Cash and cash equivalents                     $ (1,388,000)  c      $   3,320,591 
                                                        (863)  d
                                                   3,183,421   l
  Restricted cash                                  1,388,000   c          1,388,000 
  Accounts receivable, net                                 -                336,214 
  Other current assets                                     -                109,084 
                                                -------------         --------------
    sub-total current assets                       3,182,558              5,153,889 

Fixed assets, net                                     46,980   e            135,000 
Advances to acquired entities                       (200,000)  b            (61,626)
                                                  (2,966,358)  f
Intangible assets
  Customer lists                                     157,500   g            180,000 
  Tradename and trademarks                           161,000   g            161,000 
  Technology                                       1,464,422   g          2,570,000 
  In-process R&D                                     190,000   g            190,000 
Goodwill                                          21,402,694   b         21,402,694 
Deferred financing fees                             (207,067)  h            869,079 
                                                     614,079   l
                                                     255,000   m
Other assets                                               -                  5,000 
                                                -------------         --------------
  sub-total other assets                          20,918,250             25,451,147 
                                                -------------         --------------
Total Assets                                    $ 24,100,808          $  30,605,036 
                                                =============         ==============

Current Liabilities
  Accounts payable                              $    657,633   b      $   2,797,106 
                                                    (166,252)  j
  Cash overdraft                                        (863)  d                  - 
  Loan interest payable                             (461,523)  j            479,711 
  Advances from acquired entity and affiliate     (2,966,358)  f                  - 
  Accrued payroll taxes payable                                             530,923 
  Accrued compensation and payroll                (1,040,537)  j          2,882,182 
  Notes, loans and payables due to
   officers/shareholders                            (869,688)  j          1,854,631 
  Deferred revenue                                         -                264,730 
  Convertible notes payable                        4,500,000   i          4,500,000 
  Bridge notes payable                             2,456,140   l          2,456,140 
  Notes payable                                    2,613,000   j          2,613,000 
  Notes and commitments payable                      (75,000)  j          1,162,414 
  Accrued dividends                                 (617,830)  k                  - 
  Current maturities of capital leases                     -                  1,912 
  Accrued technology license fees                          -                450,000 
  Other current and accrued liabilities                    -                142,395 
                                                -------------         --------------
    sub-total current liabilities                  4,028,722             20,135,144 

Demand notes payable                                       -              1,738,667 
Capital lease, net of current maturities                   -                  4,401 

Preferred stock                                  (10,638,936)  a                  - 
                                                -------------         --------------
  Total liabilities                               (6,610,214)            21,878,212 

Common stock subject to
  Put Right (2,000,000 shares)                             -              1,000,000 

Stockholders' Equity
  (Deficiency)
  Common stock                                      (720,344)  a            519,062 
                                                     149,000   b
  Additional paid in capital                      (3,481,483)  a         41,744,711 
                                                  12,516,000   b
                                                     255,000   m
  Warrants to be issued                            2,167,500   b          3,508,860 
                                                   1,341,360   l
  Common stock to be issued                                -              4,671,400 
  Stock subscription receivable                       24,532   a                  - 
  Common stock repurchase obligation                                     (1,300,000)
  Deferred compensation                              383,627   a         (1,475,333)
  Accumulated deficit                             18,075,830   a        (39,941,876)
                                                -------------         --------------
    Total Stockholders' Equity (Deficiency)       30,711,022              7,726,824 
                                                -------------         --------------

    Total Liabilities and
      Stockholders' Equity (Deficiency)         $ 24,100,808          $  30,605,036 
                                                =============         ==============


See notes to proforma condensed consolidated financial statements.


                                       82



                           UNAUDITED PROFORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

                                                                         FOR THE YEAR ENDED DECEMBER 31, 2004
                                                     --------------------------------------------------------------------------
                                                                       COMPLETE
                                                                       SECURITY          IDK                        ENTELAGENT
                                                         PATRON        SOLUTIONS,    ENTERPRISES,    LUCIDLINE,     SOFTWARE
                                                      SYSTEMS, INC.       INC.           INC.           INC.       CORPORATION
                                                     ---------------  ------------  --------------  ------------  -------------
                                                                                                   
Revenue                                              $            -   $         -   $   1,039,743   $   243,915   $    538,539 
Cost of Sales                                                     -             -         279,764       222,699        100,214 
                                                     --------------------------------------------------------------------------
  Gross Profit                                                    -             -         759,979        21,216        438,325 

General and administrative                                1,923,752       279,262       3,351,504       625,223      1,130,813 



Stock-based penalty under accommodationg agreements       1,434,900             -               -             -              - 
Common stock issued to non-employees for services           767,567             -               -             -              - 
Loss associated with settlement agreement                   438,667             -               -             -              - 
Charges associated with share-exchange transaction           45,215             -               -             -              - 
                                                     --------------------------------------------------------------------------
Total Operating Expenses                                  4,610,101       279,262       3,351,504       625,223      1,130,813 

                                                     --------------------------------------------------------------------------
Loss from Operations                                     (4,610,101)     (279,262)     (2,591,525)     (604,007)      (692,488)

Interest Income                                              77,000        21,129               -             -              - 
Interest Expense                                           (132,350)      (85,450)       (454,415)      (13,297)      (333,027)


                                                     --------------------------------------------------------------------------
    Income (loss) before income taxes                    (4,665,451)     (343,583)     (3,045,940)     (617,304)    (1,025,515)

Provision for Income Taxes                                        -             -               -             -              - 
                                                     --------------------------------------------------------------------------
    Net Loss                                         $   (4,665,451)  $  (343,583)  $  (3,045,940)  $  (617,304)  $ (1,025,515)
                                                     ===============  ============  ==============  ============  =============

Net loss per share - Basic and Diluted               $        (0.12)
Weighted average number of shares
    outstanding - Basic and Diluted                      38,808,280
Related party interest expense                               33,490             -           4,412             -        206,445


                                                                             PRO FORMA
                                                                            CONSOLIDATED
                                                       PRO FORMA             FULL YEAR
                                                      ADJUSTMENTS   NOTE:       P&L
                                                     -------------  -----  --------------
                                                                  
Revenue                                              $          -          $   1,822,197 
Cost of Sales                                             234,236   n            836,913 
                                                     -------------         --------------
  Gross Profit                                           (234,236)               985,284 

General and administrative                               (146,750)  n          7,459,506 
                                                         (107,300)  p
                                                           23,490   q
                                                          379,512   r
Stock-based penalty under accommodationg agreements             -              1,434,900 
Common stock issued to non-employees for services               -                767,567 
Loss associated with settlement agreement                       -                438,667 
Charges associated with share-exchange transaction              -                 45,215 
                                                     -------------         --------------
Total Operating Expenses                                  148,952             10,145,855 

                                                     -------------         --------------
Loss from Operations                                     (383,188)            (9,160,571)

Interest Income                                           (77,000)  o             21,129 
Interest Expense                                           77,000   o         (3,251,464)
                                                       (1,043,860)  s
                                                         (614,079)  t
                                                         (396,986)  u
                                                         (255,000)  v
                                                     -------------         --------------
    Income (loss) before income taxes                  (2,693,113)           (12,390,906)

Provision for Income Taxes                                      -                      - 
                                                     -------------         --------------
    Net Loss                                         $ (2,693,113)         $ (12,390,906)
                                                     =============         ==============

Net loss per share - Basic and Diluted                                     $       (0.23)
Weighted average number of shares
    outstanding - Basic and Diluted                    14,900,000             53,708,820 
Related party interest expense                                  -                244,347


See notes to proforma condensed consolidated financial statements.


                                       83

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AT DECEMBER
31, 2004

a)   Represents the elimination of the historical stockholders' equity
     (deficiency) for each of the merged businesses

b)   The mergers are being accounted for as purchase business combinations.
     Accordingly, the Company (on a preliminary basis) established a new basis
     of accounting for each of the merged businesses by allocating their
     respective purchase prices (including direct transaction costs), to the
     fair values of the assets acquired and liabilities assumed as of the dates
     the mergers were consummated using estimates and assumptions it believes
     are reasonable. A final determination of the allocations of the purchase
     prices to the assets acquired and liabilities assumed based on their
     respective fair values as of the dates of the mergers has not yet been
     completed. Accordingly, the purchase price adjustments made in connection
     with the development of the Pro Forma Financial Statements are preliminary
     and have been made solely for purposes of developing such Pro Forma
     Financial Statements. The Company is performing a valuation study to
     determine the fair value of the assets and liabilities of CSSI, LucidLine
     and Entelagent and will make appropriate purchase accounting adjustments
     upon the completion of the valuation study. The actual results of the
     allocation may differ significantly from management's estimates.

     The following tables provide a breakdown of (a) the respective purchase
     prices of each of the merged businesses including the fair value of
     purchase consideration issued to the sellers plus direct transaction
     expenses incurred by the Company in connection with consummating these
     transactions, and (b) the Company's preliminary allocation of its purchase
     prices.


                                       84



                                   Complete                         Entelagent
                                   Security                          Software
                               Solutions, Inc.   LucidLine, Inc.   Corporation      Total
                               ----------------  ----------------  ------------  -----------
                                                                     
Cash                           $              -  $        200,000  $          -  $   200,000
Common Stock                          6,375,000         3,740,000     2,550,000   12,665,000
Subordinated promissory notes         4,500,000                 -             -    4,500,000
Common stock warrants                 1,912,500                 -             -    1,912,500
Transaction expenses                    398,128           154,611       359,894      912,633
                               ----------------  ----------------  ------------  -----------
  Total Purchase Price         $     13,185,628  $      4,094,611  $  2,909,894  $20,190,133
                               ================  ================  ============  ===========




                                           Complete                           Entelagent
                                           Security                            Software
                                        Solutions, Inc.    LucidLine, Inc.    Corporation      Total
                                       -----------------  -----------------  -------------  ------------
                                                                                
Fair value of tangible assets:
  Cash                                 $      1,470,382   $              -   $      9,750   $ 1,480,132 
  Accounts receivable                           216,960             12,422        106,832       336,214 
  Employee receivables                                -                  -         39,216        39,216 
  Other current assets                          100,574              2,200              -       102,774 
                                       -----------------------------------------------------------------
    Total current assets                      1,787,916             14,622        155,798     1,958,336 
  Property and Equipment                         26,921             60,405            694        88,020 
  Other assets                                        -                  -          5,000         5,000 
  Advances to prospective affiliates          2,097,969                  -              -     2,097,969 
                                       -----------------------------------------------------------------
  Total  tangible assets                      3,912,806             75,027        161,492     4,149,325 

Liabilities assumed:
  Accounts payable                              (36,633)           (47,047)      (496,394)     (580,074)
  Cash overdraft                                      -               (863)             -          (863)
  Accrued compensation                         (143,408)                 -     (1,731,511)   (1,874,919)
  Advances from prospective affiliate                 -           (577,000)    (1,717,749)   (2,294,749)
  Deferred revenue                             (145,275)                 -       (119,455)     (264,730)
  Accrued expenses
    and other current liabilities              (168,214)           (97,813)    (3,224,103)   (3,490,130)
                                       -----------------------------------------------------------------
    Total current liabilities                  (493,530)          (722,723)    (7,289,212)   (8,505,465)
  Long term liabilities                               -             (4,401)             -        (4,401)
                                       -----------------------------------------------------------------
    Total liabilities assumed                  (493,530)          (727,124)    (7,289,212)   (8,509,866)
                                       -----------------------------------------------------------------
Net tangible assets acquired           $      3,419,276   $       (652,097)  $ (7,127,720)  $(4,360,541)

Increased valuation of fixed assets    $         35,079   $            595   $     11,306   $    46,980 
Value of excess allocated to:
  Developed technology                          670,000                  -      1,900,000     2,570,000 
  Customer relationships                        180,000                  -              -       180,000 
  Trademarks and tradenames                      55,000                  -        106,000       161,000 
  In-process research and
   development                                  190,000                  -              -       190,000 
Goodwill                                      8,636,273          4,746,113      8,020,308    21,402,694 


(c)  Represents $1,388,000 of funds set aside in a restricted cash escrow
     account to pay certain Entelagent liabilities pursuant to the merger
     agreement with Entelagent

(d)  Adjustment to reclassify LucidLine's cash overdraft to cash and cash
     equivalents

(e)  Represents an increase in the historical basis of each of the acquired
     businesses' property and equipment to their estimated fair values.


                                       85

(f)  Represents the advances made by Patron and CSSI to LucidLine and Entelagent
     being eliminated against the LucidLine and Entelagent balance sheet
     liability of advances from affiliate (Patron and CSSI).

(g)  Represents the allocation of a portion of the excess of the purchase prices
     over the fair value of assets acquired (liabilities assumed) of each of the
     merged businesses to the estimated fair value of their amortizable
     intangible assets.

(h)  Represents the elimination of deferred financing costs of CSSI and IDK for
     transactions that originated prior to, but did not survive, such mergers.

(i)  Represents a note issued as purchase consideration to the preferred
     stockholders of CSSI.

(j)  Represents the conversion of $2,613,000 of certain Entelagent trade
     payables and other amounts due to related parties into a note payable
     bearing an interest rate of 8% per annum maturing one year after the
     completion of the merger.

(k)  Represents the elimination of accrued contractual dividends payable to the
     preferred stockholders of CSSSI and IDK that the Company did not assume in
     its acquisition of such businesses.

(l)  Represents the $3,500,000 financing (the "Bridge Financing") completed in
     conjunction with the mergers. This financing resulted in the issuance of
     10% Senior Convertible Promissory Notes and warrants to purchase up to
     1,750,000 shares of the Company's common stock. The Bridge Financing notes
     have an initial term of 120 days. Additionally, the Bridge Financing notes,
     if extended beyond the initial term of 120 days, will carry an interest
     rate of 12% per annum. The Company allocated $2,456,140 of the proceeds to
     the Bridge Notes and $1,043,860 of the proceeds to the warrants.
     Additionally, the Company incurred deferred financing costs which amounted
     to $614,079, including cash fees paid at closing from the financing
     proceeds which totalled $316,579 and $297,500 representing the fair value
     of 350,000 common stock purchase warrants issued to Laidlaw & Company (UK)
     Ltd. in their capacity as the placement agent in the $3,500,000 Bridge
     Financing transaction.

(m)  Represents the aggregate fair value of 300,000 common stock purchase
     warrants issued to Laidlaw & Co. (UK) Ltd. in connection with acquisition
     related services.

NOTES TO UNAUDITED PRO FORMA ADJUSTMENTS TO CONDENSED CONSOLIDATED STATEMENT OF
OPERATIONS - YEAR ENDED DECEMBER 31, 2004


(n)  Adjustment to record increased amortization of intangible assets of $87,486
     for the year ended December 31, 2004. Recorded as $234,236 to Cost of Sales
     for the amortization of developed technology and $(146,750) in General and
     Administrative expenses for the amortization of other intangibles.

(o)  Adjustment to eliminate the interest income at Patron on loans made to
     Entelagent ($77,000) and elimination of the corresponding interest expense
     at Entelagent.

(p)  Adjustment to eliminate the $107,300 expense associated with acquisitions
     not consummated.

(q)  Adjustment to increase depreciation for the step-up in basis of fixed
     assets.

(r)  Adjustment to compensation for employment agreements issued to key
     executives at Entelagent and LucidLine.

(s)  Adjustment to record the accretion of the discount recorded on the Bridge
     Financing notes. This accretion, amounting to $1,043,860, is included as a
     component of interest expense.


                                       86

(t)  Adjustment to record the amortization of the deferred financing costs which
     are being amortized over the minimum term of the debt instrument which is
     120 days. This amortization expense is included as a component of interest
     expense in the accompanying statement of operations.

(u)  Adjustment to record the interest expense associated with the Bridge
     Financing notes at 10% per annum for 120 days and 12% per annum for the
     balance of the pro forma period to December 31, 2004.

(v)  Adjustment to record the interest expense associated with the
     amortization of the 300,000 common stock purchase warrants issued to
     acquisition adviser Laidlaw & Company (UK) Ltd.


                                       87

                                    SIGNATURE

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.


                                    PATRON  SYSTEMS,  INC.


Date:  December 8, 2005               By:  /s/ Robert Cross
                                          -------------------------------------
                                      Robert Cross
                                      Chief Executive Officer


                                       88