Current Report — Form 8-K Filing Table of Contents
Document/ExhibitDescriptionPagesSize 1: 8-K Form 8-K Ethos Environmental, Inc. 080707 HTML 31K
4: EX-10.1 Ex 10.1 Property Purchase Agreement 080707 HTML 6K
2: EX-10.1 Ex 10.1 Property Purchase Agreement 080707 -- PDF 1.90M
ex10-1ethos
3: EX-10.2 Ex 10.2 Addendum No. 1 to Property Purchase HTML 13K
Agreement 080707
6: EX-10.3 Ex 10.3 Lease Agreement 080707 HTML 7K
5: EX-10.3 Ex 10.3 Lease Agreement 080707 -- ex10-3ethos PDF 2.63M
8: EX-10.4 Ex 10.4 Addendum No.1 to Lease Agreement 080707 HTML 5K
7: EX-10.4 Ex 10.4 Addendum No.1 to Lease Agreement 080707 -- PDF 148K
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9: EX-10.5 Ex 10.5 Addendum No. 2 to Lease Agreement 080707 HTML 10K
10: EX-10.6 Ex 10.6 Subscription Agreement 080707 HTML 118K
11: EX-10.7 Registration Rights Agreement 080707 HTML 117K
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appropriate box below if the Form 8-K filing is intended to simultaneously
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communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
1
Item
1.01 Entry
into a Material Definitive Agreement.
On
August7, 2007, Ethos Environmental, Inc. (the “Company”) entered into a Commercial
Property Purchase Agreement and Joint Escrow Instructions (the “Property Sale
Agreement”) with Green Bridge Capital Partners, IV, LLC (the “Buyer”). The
Property Sale Agreement provides for the sale of the Company’s facility (the
“Premises”), located at 6800 Gateway Park Drive in San Diego, California, to the
Buyer for a price of $7,875,000 in cash (the “Purchase Price”). The Premises
primarily consist of one building with four (4) separate units totaling
approximately 60,000 total square feet (which includes more than 14,000 square
feet of office space), approximately 60 on-site surface parking spaces, and
the
underlying land with improvements and all fixtures attached
thereto.
Simultaneously,
the Company entered into an AIR Commercial Real Estate Association Standard
Industrial/Commercial Single Tenant Lease Agreement (the “Lease Agreement”) to
lease back the Premises from Buyer. The lease term is 15 years and is
tentatively set to commence on October 1, 2007. The base rent per the Lease
Agreement is fixed at $63,000 per month, with customary increases, on an annual
basis per the terms of the Lease Agreement.
As
part
of the Property Sale Agreement, and in consideration of the Purchase Price,
the
Company also entered into a Subscription Agreement (the “Subscription
Agreement”) with the Buyer for the sale of 2,500,000 shares of its common stock
(the “Shares”) in a private placement. The Purchase Price was allocated as
follows: (1) $5,875,000 to the purchase of the Premises and (2) $2,000,000
to
the purchase of the Shares. The Company did not pay any placement agent fees
or
commissions.
Pursuant
to the Subscription Agreement, the Investors purchased the Shares at a purchase
price of $0.80 per share.
The
Shares were issued in a private placement, were not registered under the
Securities Act of 1933, as amended (the “Securities Act”) and may not be offered
or sold in the United States absent registration under the Securities Act or
an
applicable exemption from the registration requirements of the Securities Act.
Pursuant
to a Registration Rights Agreement (the “Registration Rights Agreement”) between
the Company and the Buyer executed simultaneously to the Subscription Agreement,
the Company agreed to register for resale under the Securities Act the Shares.
The Registration Rights Agreement also provides indemnification and contribution
remedies to the Investors in connection with the resale of the Shares pursuant
to such registration statement.
In
addition, the Registration Rights Agreement provides that in the event the
Company has not obtained a Notice of Effectiveness from the Securities and
Exchange Commission ("SEC") registering the Shares for resale on or before
February 15, 2008 (the "Filing Deadline"), the Buyer shall be entitled to
a
liquidated damages payment, subject to the terms and conditions of the
Registration Rights Agreement, for each 30-day period after the Filing Deadline
during which such registration statement has not been declared effective
by the
SEC.
These
foregoing agreements (the “Transaction Documents”) have resulted in the receipt
by the Company of approximately $2 million cash in August 2007, which is being
used to fund working capital needs. Upon the closing of the Property Purchase
Agreement, the balance of the Purchase Price, i.e. $5,875,000, will be used
to
pay off the existing mortgage on the Premises and to fund working capital needs.
There
is
no material relationship between the Buyer and the Company or any affiliate,
director, officer or associate of the Company.
The
foregoing descriptions of the Transaction Documents do not purport to be
complete and are qualified in their entirety by reference to such agreements,
copies of which are filed hereto, respectively, and incorporated into this
report by reference.
Item
2.01 Completion
of Acquisition or Disposition of Assets.
As
set
forth in Item 1.01, on August 7, 2007, the Company entered into the Purchase
Agreement in which the Company agreed to sell the Premises to the Buyer for
the
Purchase Price.
2
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
As
set
forth in Item 1.01, on August 7, 2007, the Company entered into a transaction
to
sell the Premises and simultaneously entered into the Lease Agreement to lease
back such facility under an operating lease once the Property Purchase Agreement
closes.
Item
3.02 Unregistered
Sales of Equity Securities.
The
2,500,000 shares of Company common stock issued to the Buyer in the private
placement were issued in reliance on Section 4(2) under the Securities Act
and
Regulation D promulgated thereunder in a transaction not involving a public
offering.
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.
