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: April 9, 2007
Paradigm Holdings, Inc.
(Exact Name of Registrant as Specified in Charter)
Wyoming (State or other jurisdiction of incorporation) | 09-154 (Commission File Number) | 83-0211506 (IRS Employer Identification No.) |
9715 Key West Avenue, Third Floor, Rockville, Maryland 20850
(Address of principal executive offices) (Zip code)
(301) 468-1200
Registrant's telephone number, including area code
None
(Former Name or Former Address, If Changed Since Last Report)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On April 9, 2007, Paradigm Holdings, Inc., a Wyoming corporation (the “Company”), issued a secured promissory note to Ms. Theresa Kleszewski in connection with the Stock Purchase Agreement (as described in Item 2.01 below), in the principal sum of Four Million Dollars (US $4,000,000) (the “Promissory Note”).
Under the terms of the Promissory Note, the Company will repay the principal sum of Four Million Dollars (US $4,000,000) plus interest at the annual rate of seven and three-quarters percent (7.75%) of the unpaid balance pursuant to the following terms:
(a) Five Hundred Thousand Dollars (US $500,000), less any Designated Professional Payments, shall be paid to Ms. Kleszewski within three (3) business days of April 9, 2007, and the Designated Professional Payments shall be paid as instructed by Ms. Kleszewski;
(b) One and One Half Million Dollars (US $1,500,000) (the “Second Amount”) shall by paid to Ms. Kleszewski on June 30, 2007; and
(c) the remainder amount (the “Remainder Amount”) equal to Two Million Dollars (US $2,000,000) shall be paid to Ms. Kleszewski on October 31, 2008.
For purposes of the foregoing, “Designated Professional Payments” means payments designated by Ms. Kleszewski as payments for invoices of attorneys and/or other professionals who have rendered services to Ms. Kleszewski in connection with the Stock Purchase Agreement. The Promissory Note may be voluntarily prepaid, without penalty or premium, in whole or in part, at any time and from time to time. Any prepayment must include all accrued interest on the principal being paid through the date of prepayment. Ms. Kleszewski shall have the option to elect to receive as partial repayment of the Second Amount or the Remainder Amount up to a maximum of One Million Dollars ($1,000,000) of the principal amount of the Promissory Note in increments of One Hundred Thousand Dollars ($100,000), in the form of restricted shares of the Company’s common stock, calculated based on the average closing price of the Company’s common stock for the five trading days prior to the date of the issuance of the shares of Company common stock. Such payments of part or all of the Second Amount and/or the Remainder Amount in Shares, up to the maximum described above, shall be made at the election of Ms. Kleszewski and shall be restricted by a vesting period equal to the earlier of: (i) 18 months from the date of the issuance of the Shares or (ii) the occurrence of a change of control of the Company. Any remaining portion of the principal amount of the Promissory Note shall be paid to Ms. Kleszewski in cash.
A copy of the Promissory Note is attached hereto as Exhibit 99.2.
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On April 9, 2007, the Company completed the acquisition of Trinity IMS, Inc., a Nevada corporation (“Trinity”), pursuant to a Stock Purchase Agreement (the “Stock Purchase Agreement”) executed on January 29, 2007 by and among the Company, Trinity and the shareholders of Trinity (the “Shareholders”). Pursuant to the terms and conditions set forth in the Stock Purchase Agreement, the Company purchased from the Shareholders, all of the issued and outstanding capital stock of Trinity and Trinity will become a wholly-owned subsidiary of the Company in exchange for the Promissory Note (as described above in Item 1.01) issued to Ms. Kleszewski on April 9, 2007.
Trinity provides specialized information assurance (“IA”) and cyber forensics support services to the federal government, primarily the U.S. Department of State. Trinity’s focus on cyber forensics and information assurance services in support of the U.S. Department of State compliments the Company’s strategic plan to expand its IT solutions into the national security marketplace. Trinity provides the Company with access to key customers, security clearances and technical expertise.
In addition, under certain conditions as set forth in the Stock Purchase Agreement, the Shareholders will be eligible for incentive bonuses for winning new contracts for Trinity.
In addition on April 9, 2007, the Company entered into a two (2) year Executive Employment Agreement by and between the Company and Christian L. Kleszewski, a principal of Trinity, under which the Company agrees to employ Mr. Kleszewski as Vice President of Information Assurance of the Company, reporting to Mr. Peter B. LaMontagne, President and CEO of the Company. Mr. Kleszewski shall be paid a base salary at an annual rate of $210,000 and be entitled to participate in the Company’s health and benefit plans.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
See Items 1.01 and 2.01 for further information.
ITEM 7.01. REGULATION FD DISCLOSURE.
On April 12, 2007, the Company issued a press release with respect to completing the acquisition of Trinity. A copy of the press release is attached hereto as Exhibit 99.4.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The financial statements of the business acquired required by this item are not included in this Current Report on Form 8-K. The financial statements will be provided pursuant to an amended report, which will be filed not later than 71 calendar days after the date that this initial report on Form 8-K is required to be filed.
(b) Pro Form Financial Information.
The financial information required by this item is not included in this Current Report on Form 8-K. The financial information will be provided pursuant to an amended report, which will be filed not later than 71 calendar days after the date that this initial report on Form 8-K is required to be filed.
(c) Not applicable.
(d) Exhibit No. Description:
EXHIBIT | DESCRIPTION | LOCATION |
| | | |
| Exhibit 99.1 | Stock Purchase Agreement, dated January 29, 2007, by and among Paradigm Holdings, Inc., Trinity IMS, Inc. and the shareholders of Trinity IMS, Inc. | Incorporated by reference to Form 8-K filed on January 31, 2007 |
| Exhibit 99.2 | Promissory Note, dated April 9, 2007, issued by Paradigm Holdings, Inc. to Theresa Kleszewski | Provided herewith |
| Exhibit 99.3 | Executive Employment Agreement, dated April 9, 2007, by and between Paradigm Holdings, Inc. and Christian L. Kleszewski | Provided herewith |
| Exhibit 99.4 | Press Release | Provided herewith |
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 13, 2007 | | PARADIGM HOLDINGS, INC. |
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| | | By: | | /s/ Peter LaMontagne |
| | | | | Peter LaMontagne Chief Executive Officer |
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