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): January 13, 2003
PATRON HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
NEVADA 0-25675 88-0346441
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
212 WEST KINZIE STREET, CHICAGO, ILLINOIS 60610
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (312) 493-2171
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On January 13, 2003, Patron Systems, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Registrant ("Patron Systems"), entered into a
term sheet (the "Term Sheet") with a private group of international investors
(the "Investors"), pursuant to which the Investors have agreed to provide an
investment facility to Patron Systems in an aggregate amount of up to $40
million for use by Patron Systems in the information security services and
products markets.
The investment facility is to be comprised of (i) a $15 million equity
investment in privately placed common stock of Patron Systems at a price per
share of $5.00 and (ii) $25 million in subordinated debt available in increments
of not less than $5 million at the discretion of Patron Systems. The $15 million
equity investment is to be used by Patron Systems to consummate the acquisition
of TrustWave Corp. on or before February 21, 2003. A portion of the proceeds of
the investment facility will also be used to consummate the acquisition by
Patron Systems of Entelagent Software Corp.
Each tranche of subordinated debt will have a seven-year maturity and
will accrue interest at the prime rate quoted in The Wall Street Journal. During
the first year, Patron Systems will only be obligated to make interest payments
and will be obligated to pay principal and interest thereafter until maturity.
Additional terms for each tranche of subordinated debt are to be mutually agreed
upon by Patron Systems and the Investors at the time of each investment by the
Investors. The subordinated debt facility may be drawn down for up to a period
of one year.
The investment facility provides that the proceeds of the investment
facility are to be used by Patron Systems to finance certain acquisitions,
including the acquisition of TrustWave Corp. and Entelagent Software Corp.,
start-up costs, world-wide business development opportunities and for general
working capital purposes. Patron Systems has agreed to pay the Investors (i) a
semi-annual fee of 25 basis points on all uncommitted funds and (ii) a
commitment fee of 3%, payable in equity or cash at the election of Patron
Systems, on the first anniversary of the execution of the Term Sheet.
Patron Systems and the Investors have also agreed to jointly pursue
business development opportunities in Europe and Asia related to wireless
information security initiatives. Definitive agreements memorializing such
initiatives are to be finalized by March 31, 2003.
On January 14, 2003, the Registrant issued a press release announcing
the execution of the Term Sheet, which is attached hereto as Exhibit 99.1.
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The statements made in this Current Report on Form 8-K contain
forward-looking statements and are based on current expectations that are
subject to a number of uncertainties and risks, and actual results may differ
materially. The uncertainties and risks include, but are not limited to, the
ability to complete the proposed financing described herein, the ability to
complete the proposed reincorporation merger or any proposed acquisitions, the
ability of the Registrant or Patron Systems to execute effectively its business
plan, changes in the market for information security solutions, changes in
market activity, anticipated increases in customers, seasonality, the
development of new products and services, the enhancement of existing products
and services,
competitive pressures (including price competition), system failures, economic
and political conditions, changes in consumer behavior and the introduction of
competing products having technological and/or other advantages. Any
forward-looking statements are made pursuant to the Private Securities
Litigation Reform Act of 1995 and, as such, speak only as of the date made.
Statements made in this document that are not purely historical are
forward-looking statements, including any statements as to beliefs, plans,
expectations, or intentions regarding the future. The Registrant assumes no
obligation to update information concerning its expectations.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
Exhibit
Number Description of Exhibit
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99.1 Press Release issued by the Company on January 14, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
PATRON HOLDINGS, INC.
By: /s/ Marie Meisenbach Graul
---------------------------
Marie Meisenbach Graul
Chief Financial Officer
Date: January 15, 2003
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
------- ----------------------
99.1 Press Release issued by the Company on January 14, 2003.