Timios National Corporation (fka HOMS)

[cableguy]

8-K out,ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

On August 21, 2006, Homeland Security Capital Corporation (the “Company”) entered into a Securities Purchase Agreement with Cornell Capital Partners, LP (“Cornell Capital”), which provides for the purchase by Cornell Capital of a secured convertible debenture (the “Debenture”) in the amount of $4,000,000. The Debenture is convertible into the Company’s common stock, par value $0.001 per share (the “Common Stock”), based on a conversion price which shall be equal to the lesser of (1) $0.01 or (2) a ten percent discount to the lowest daily volume weighted average price of the Common Stock for the thirty days preceding conversion. The Debenture bears interest at 5% per annum and the principal amount will be payable on the third anniversary of the effective date of the Debenture. If the closing bid price of the Common Stock is trading below the conversion price at the time of the redemption notice, the Company shall pay an amount equal to the principal amount being redeemed plus a redemption premium equal to twenty percent (20%) of the principal amount being redeemed, and accrued interest. Pursuant to a Pledge and Security Agreement between the Company and Cornell Capital, issued in connection with the Debenture, the Company's obligations under the Debenture are secured by a pledge of all of its assets.

In connection with the Securities Purchase Agreement, the Company issued a warrant to Cornell Capital for 100,000,000 shares of the Company’s Common Stock. The warrant has an exercise price equal to $0.01, which may be adjusted under the terms of the warrant, and has a term of five years from the date of issuance on August 21, 2006. The Company also entered into an Investor Registration Rights Agreement with the Cornell Capital pursuant to which the Company is obligated to file a registration statement covering the resale of shares of Common Stock issuable upon the conversion of the Debenture.

The foregoing is a summary of the terms and conditions of the Securities Purchase Agreement, the Convertible Debenture, the Pledge and Security Agreement, the Investor Registration Rights Agreement, and the Warrant and does not purport to be complete. The foregoing is also qualified in its entirety by reference to the above-mentioned agreements, copies of which are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference.

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