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: March 8, 2006
Date of Earliest Event Reported: March 3, 2006
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NATURAL GAS SYSTEMS, INC.
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(Exact Name of Registrant as Specified in its Charter)
Nevada
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(State or Other Jurisdiction of Incorporation)
0-27862 41-1781991
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(Commission File Number) (I.R.S. Employer Identification No.)
820 Gessner, Suite 1340, Houston, Texas 77024
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(Address of Principal Executive Offices) (Zip Code)
(713) 935-0122
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(Registrant's Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
TABLE OF CONTENTS
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 9.01 Financial Statements and Exhibits
Signatures
Item 1.01. Entry into a Material Definitive Agreement
Subordinated Promissory Note Loan Agreement with Laird Cagan
On March 3, 2006, Natural Gas Systems, Inc. ("NGS" or the "Company")
entered into a subordinated loan agreement with Laird Q. Cagan whereby Mr. Cagan
loaned the Company $250,000 (the "Subordinated Note"). The Subordinated Note has
a one year term and accrues interest at 10%, payable at maturity. The
Subordinated Note also has certain acceleration provisions in the event the
Company raising additional capital in excess of $2 million and is subject and
subordinated to the Company's previous senior secured loan agreement with
Prospect Energy Corporation, dated February 2, 2005, as amended, totaling
$5,000,000. The proceeds of the Subordinated Loan are intended for general
working capital purposes. As previously reported, Laird Q. Cagan, the Company's
Chairman of the Board, also acts the Company's non-exclusive placement agent for
capital raising services through Chadbourn Securities, Inc.
The foregoing description is qualified by reference to Exhibit 10.1 to
this Current Report on Form 8-K, which Exhibit is incorporated herein by
reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
See Item 1.01 above.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits.
The following exhibit is filed as an exhibit to this Current Report on
Form 8-K:
Exhibit No. Description
10.1 Subordinated Promissory Note, dated March 3, 2006, between
Natural Gas Systems, Inc. and Laird Q. Cagan
SIGNATURES
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.
NATURAL GAS SYSTEMS, INC.
Date: March 8, 2006 By: /s/ Robert Herlin
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Robert Herlin, Chief Executive Officer