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
ETHOS
ENVIRONMENTAL, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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88-0467241
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(State
or other jurisdiction
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(Commission
File Number)
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(IRS
Employer
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of
Incorporation)
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Identification
Number)
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6800
Gateway Park Drive
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(Address
of principal executive offices)
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(Registrant’s
Telephone Number)
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(Former
name or former address, if changed since last report)
Copy of
all Communications to:
Luis
Carrillo, Esq.
SteadyLaw
Group, LLP
501
W. Broadway, Suite 800
phone:
619.399.3090
fax:
619.330.1888
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))
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Item
1.01
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Entry
Into Material Definitive Agreement
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On
October 16, 2008, Ethos Environmental, Inc., a Nevada corporation, (the
“Registrant” or the “Company”), entered into a Settlement Agreement and General
Mutual Release (the “Settlement Agreement”) with GreenBridge Capital Partners,
IV, LLC, a Delaware limited liability company, (“GBCP”).
To date,
the GBCP Stock has not been registered and GBCP has received 2,265,428 shares of
the Registrant’s common stock as liquated damages per the terms of the
Registration Rights Agreement. In excahnge for cancellation
of the Registration Rights Agreement, GBCP has agreed to accept 10,200,000
additional shares of Company common stock.
The
Managing Member of GBCP is Corey P. Schlossmann, our interim Chief Executive
Officer, President, Secretary and Chairman. Mr. Schlossmann abstained
from the vote of the Board of Directors pertaining to the Settlement
Agreement.
The
foregoing description of the Settlement Agreement does not purport to be
complete and is qualified in its entirety by reference to the agreement, a
copy of which is filed as Exhibit 99.1, and incorporated by
reference.
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Item
1.02
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Termination
of a Material Definitive Agreement
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Item
2.03
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Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant
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On
September 11, 2008, in exchange for the surrender and cancellation of 13,600,000
shares of the Company’s common stock (the “Stock”) held by Enrique de Vilmorin,
the Company agreed to assume a $500,000 secured promissory note (the “Old Note”)
payable by Mr. de Vilmorin to Newport Investment Group Ltd (“Newport”).
The
13,600,000 shares represented Mr. de Vilmorin’s entire position in the
Company.
In
furtherance of the Assumption Agreement, on October 16, 2008, the Company issued
a new promissory note (the “New Note”) in the original principal amount of
$500,000 to Newport. The New Note is due on October 1, 2009, and bears interest
at the rate of 10% per annum. Newport agreed to waive all of its
rights under the Old Note, including all rights to the Stock.
The
foregoing description of the Assumption Agreement and the New Note are not
complete and are qualified in their entirety by reference to the Assumption
Agreement and the New Note, which are attached as Exhibits 99.2 and 99.3,
respectively.
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ITEM
4.02.
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NONRELIANCE
ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR
COMPLETED INTERIM REVIEW
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On
October 16, 2008, the Company concluded that all previously reported
consolidated financial statements filed since, and including, our annual report
for the year ended December 31, 2006 should no longer be relied
upon.
The Board
of Directors directed a review of the Company’s prior revenue
recognition practices with a focus on the accounting treatment for various
transactions, in particular the accounting treatment for certain accounts
receivable, including associated revenues, and the accounting treatment for
certain transactions involving the sale of stock in 2006.
In
addition, the Board of Directors authorized an internal review of
other transactions involving Mr. de Vilmorin.
The
Company has discussed the Board’s concerns with the Company’s current and former
independent public accountants. As a result of the Board’s decision
to conduct an inquiry of the Company’s financial operations, the previously
issued financial statements and related reports of independent public
accountants should no longer be relied upon. Due to the incomplete
information in its possession, the Company is not presently able to respond to
inquiries or provide further information related to the financial statements. It
is expected that the Company will publish restated financial statements at the
conclusion of the review.
Until we
have completed our inquiry and determined the requirements for restating
previously issued financial statements and the effects of such potential
restatement for the applicable periods discussed above, investors and other
users are cautioned not to rely on our financial statements.
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Item
7.01
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Regulation
FD Disclosure
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Item
9.01
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Financial
Statements and Exhibits
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(a) Not
applicable
(b) Not
applicable
(c) Not
applicable
(d) Exhibits.
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Exhibit
No.
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Description |
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99.1
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Settlement
Agreement
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99.2
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Assumption
Agreement
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99.3
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Promissory
Note
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99.4
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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 thereunto
duly authorized.
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Ethos
Environmental, Inc. |
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By:
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/s/ Corey
P. Schlossmann |
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Corey
P. Schlossmann, |
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Interim
President & CEO |
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