UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): June 6, 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))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
On June 6, 2005, Patron Systems, Inc. (the "Registrant") completed a $2.543
million financing (the"Bridge Financing") through the issuance of (i) 10% Junior
Convertible Promissory Notes and (ii) Warrants to purchase up to 1,271,500
shares of the Registrant's Common Stock. The Warrants have a term of 5 years and
an exercise price of $0.60 per share. Prior to maturity, the Junior Convertible
Promissory Notes may be converted into the securities offered by the Company at
the first closing of a subsequent financing for the Registrant, for such number
of offered securities as could be purchased for the principal amount being
converted. The Junior Convertible Promissory Notes have an initial term of 120
days, with an option for the Registrant to extend the term for an additional 60
days, and pay interest at a rate of 10% per annum. Upon the extension of the
maturity date of the Junior Convertible Promissory Notes, the interest payable
thereunder will be increased to 12% per annum, and theRegistrant will be
required to issue warrants to purchase such number of shares of the Registrant's
Common Stock equal to of a share for each $1.00 of principal amount outstanding.
The warrants issuable upon extension of the maturity date of the Junior
Convertible Promissory notes will have a term of 5 years and an exercise price
of $0.60 per share. In addition, if the Junior Convertible Promissory Notes are
not paid in full on or beforethe extended maturity date, each noteholder will be
issued a warrant entitling the holder to purchase 3.84 shares of the
Registrant's Common Stock for each $1.00 of principal amount then outstanding.
The warrants issuable in connection with the non-payment of the Junior
Convertible Promissory Notes may only be exercised by a holder's delivery of its
Senior Convertible Promissory Note in payment of the exercise price, the
delivery of which will result in the full satisfaction of all amounts of
principal and interest due and payable under such Junior Convertible Promissory
Note. The Registrant has agreed to file with the Securities and Exchange
Commission,a registration statement for the resale of the restricted shares of
its Common Stock issuable upon exercise of the Warrants.
We sold these securities to seven accredited investors introduced by
Laidlaw & Company (UK) Ltd. ("Laidlaw"). Laidlaw acted as a broker in the
Bridge Financing. For its services asa broker, the Registrant paid Laidlaw a
cash fee of $305,160, including the reimbursement of costs, and issued to
Laidlaw and/or its designees warrants to purchase up to 152,580 shares of the
Registrant's Common Stock at an exercise price of $0.60 per share.
The issuance and sale of the securities issued or issuable in connection
with the Bridge Financing were exempt from the registration and prospectus
delivery requirements of the Securities Act of 1933, as amended (the"Securities
Act") pursuant to Section 4(2) of the Securities Act as transactions not
involving any public offering.
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: June 10, 2005 By: /s/ Robert Cross
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Robert Cross
Chief Executive Officer
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