BOULDER, Colo., Aug. 14 /PRNewswire-FirstCall/ -- Patron Systems,
Inc. (OTC:PTRN) (BULLETIN BOARD: PTRN) , a leading provider of
enterprise software to create, manage and share electronic forms
and messages, announced today its second quarter 2006 financial
results. Revenue for the second quarter ended June 30, 2006 was
$318,960 compared to $84,413 in the same period in 2005. For the
six months ended June 30, 2006, Patron reported revenue of $580,745
compared to $90,843 in the same period in 2005. The net loss
available to common stockholders for the three months ended June
30, 2006 was $1,621,017 or $0.75 per share on 2,170,653 weighted
average shares outstanding compared to $5,028,505 or $2.47 per
share on 2,032,823 weighted average shares outstanding in the three
months ended June 20, 2005. For the six months ended June 30, 2006,
the net loss available to common stockholders was $6,021,091 or
$2.83 per share on 2,127,543 weighted average shares outstanding
compared to $7,232,300 or $3.93 per share on 1,838,106 weighted
average shares outstanding for the six months ended June 30, 2005.
"The results of the second quarter of 2006 have been very
significant for the future of Patron Systems," noted CEO Robert
Cross. "During this quarter, we received a record amount of new
customer contracts and purchase orders ($1,235,000) and we disposed
of our LucidLine business unit after changing our business focus to
Active Message Management. Combined with our first quarter results,
we have generated during 2006 nearly 140% of the revenue generated
in all of 2005 when measured on a continuing operations basis.
Additionally, we continued to add additional creditors and
claimants to the amounts settled under the Creditor and Claimant
Liabilities Restructuring, bringing the total amount of debts,
claims and other liabilities settled to $29.1 million as of June
30, 2006." "In addition to these results, since June 30, 2006, our
stockholders approved the reverse split of Patron's common stock on
a 1-for-30 basis and as of August 4, 2006, the reverse split became
effective. We also announced that the Creditor and Claimant
Liabilities Restructuring program has been completed. With the
completion of this program, we have settled debts, claims and other
liabilities totaling $29.6 million for Series A-1 Preferred Stock
which has now been converted into 12,330,355 shares of Patron
common stock upon the August 4, 2006 effective date of the reverse
stock split. Additionally, Patron has settled $383,000 of
liabilities for $12,140 in cash payments. The total of all debts,
claims and other liabilities settled is nearly $30 million,"
continued Cross. The improvement in the Company's net loss
available to common stockholders includes the increased revenues
described above, improved operating expenses, reduced interest
expense and the sale of the Company's discontinued LucidLine
business unit. For the three months ended June 30, 2006, operating
expenses were reduced $909,000 to $1,625,000. This reduction
includes an increase of $159,000 associated with increased staffing
levels, a $64,000 increase associated with employee stock option
compensation expense and an increase of $263,000 in general and
administrative expense. These were offset by a $444,000 reduction
in expense associated with the amortization of stock-based
compensation arrangements, a reduction of $284,000 associated with
work performed in 2005 to bring the Company's SEC filings into
compliance and expenses associated with the 2005 acquisitions and a
reduction of $686,000 associated with 2005 penalties under
stock-based accommodation agreements and penalties under a
collateralized financing arrangement. Interest expense during the
three months ended June 30, 2006 was $88,000 which is compared to
$1,702,000 for the three months ended June 30, 2005. This reduction
is principally related to the issuance, in the three months ended
June 30, 2005, of the Bridge II Notes and the associated
amortization of deferred financing costs and the accretion of debt
discounts incurred with that financing not being incurred in the
three months ended June 30, 2006. Additionally the interest expense
associated with the outstanding Acquisition Notes and Bridge I
Notes in the three months ended June 30, 2005 was reduced with the
exchange of a substantial portion of these notes for Series A-1
Preferred stock as of March 31, 2006. On April 18, 2006, the
Company entered into an agreement to sell, effective April 1, 2006,
its LucidLine, Inc. business unit to Walnut Valley, Inc. During the
three months ended June 30, 2006, the Company reported a net loss
on discontinued operations of $0 compared to $748,000 in the three
months ended June 30, 2005. About Patron Systems Founded in 2002,
Patron Systems was established to develop products and technologies
that close gaps in the management of an organization's messaging
environment. Patron's suite of Active Message Management(TM)
products addresses eform creation, capture and sharing, and manages
data in an industry standard format (GJXDM) as well as provides
solutions for email policy management, email retention policies,
archiving and eDiscovery, proactive email supervision, and
protection of messages and their attachments in motion and at rest.
Patron serves customers in highly regulated industries such as
financial services, legal, public safety and law enforcement,
healthcare, and pharmaceuticals. Further information is available
at http://www.patronsystems.com/ . Forward-Looking Statements This
release may contain statements that are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on current estimates
and projections about Patron Systems' business, which are derived
in part on assumptions of its management, and are not guarantees of
future performance, as such performance is difficult to predict.
Actual outcomes and results may differ materially from what is
expressed or forecasted in forward-looking statements due to
numerous factors. Such factors include, but are not limited to, the
Company's ability to execute effectively its business plan and
acquisition strategy, changes in the market for electronic message
management solutions, changes in market activity, 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. These and other risks are
described in the Company's filings with the Securities and Exchange
Commission, which should be read in conjunction herewith for a
further discussion of important factors that could cause actual
results to differ materially from those in the forward-looking
statements. The Company assumes no obligation to update information
concerning its expectations. Patron Systems, and FormStream, are
registered trademarks of Patron Systems Incorporated. All other
company and product names belong to their respective owners. PATRON
SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (unaudited) Six Months Ended June 30, Three Months Ended
June 30, 2006 2005 2006 2005 Revenue $580,745 $90,843 $318,960
$84,413 Cost of Sales Cost of products/ services 29,897 2,003 - -
Amortization of technology 55,044 147,731 27,522 128,501 Total cost
of sales 84,941 149,734 27,522 128,501 Gross profit (loss) 495,804
(58,891) 291,438 (44,088) Operating Expenses Salaries and related
expenses 2,448,188 1,076,437 1,438,065 1,214,588 Consulting expense
(non-employee stock-based compensation) - 952,875 - 444,375
Professional fees 885,897 653,383 227,782 511,982 General and
administrative 621,575 757,486 297,666 35,422 Amortization of
intangibles 61,627 38,877 30,813 30,814 Stock based penalties under
accommodation agreements - 689,102 - 320,102 Stock based penalty
under collateralized financing arrangement 5,246 - 2,394 - Loss on
collateralized financing arrangement - 366,193 - 366,193
Loss/(gain) associated with settlement agreements 486,597 (389,103)
(371,616) (389,103) Total operating expenses 4,509,130 4,145,250
1,625,104 2,534,373 Operating loss (4,013,326) (4,204,141)
(1,333,666) (2,578,461) Other Income (Expense) Interest income
1,961 19,250 1,961 - Loss on sale of property and equipment (125) -
(187) - Interest expense (1,703,935) (2,196,535) (88,421)
(1,701,547) Total other income (expense) (1,702,099) (2,177,285)
(86,647) (1,701,547) Loss from continuing operations before income
taxes (5,715,425) (6,381,426) (1,420,313) (4,280,008) Income taxes
- - - - Loss from continuing operations (5,715,425) (6,381,426)
(1,420,313) (4,280,008) Loss from discontinued operations (104,962)
(850,874) - (748,497) Loss on disposal of discontinued operations
(75,920) - (75,920) - (180,882) (850,874) (75,920) (748,497) Net
loss (5,896,307) (7,232,300) (1,496,233) (5,028,505) Preferred
stock dividend (124,784) - (124,784) - Net loss available to common
stockholders $(6,021,091) $(7,232,300) $(1,621,017) $(5,028,505)
Net Loss Per Share - Basic and Diluted - Continuing operations
$(2.75) $(3.47) $(0.71) $(2.11) - Discontinued operations (0.08)
(0.46) (0.04) (0.36) - Total Net Loss per share available to common
stockholders $(2.83) $(3.93) $(0.75) $(2.47) Weighted Average
Number of Shares Outstanding - Basic and diluted 2,127,543
1,838,106 2,170,653 2,032,823 DATASOURCE: Patron Systems, Inc.
CONTACT: Sales, Martin "Tork" Johnson, cell: +1-312-543-7488, or
Press, Victor Cruz, +1-508-655-4397, , both for Patron Systems,
Inc. Web site: http://www.patronsystems.com/
Copyright