Replies to post #2017 on Timios National Corporation (fka HOMS)

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Parties to the Purchase Agreement (see page 8)
The Company . Homeland Security Capital Corporation, a Delaware corporation, was incorporated in August 1997 initially under the name “Celerity Systems, Inc.” The Company changed its business plan in December 2005 and, since then, it has primarily focused on seeking acquisitions of and joint ventures with companies that provide homeland security products and services. The Company’s substantial asset is its interest in its wholly-owned subsidiary, SEHC. After the Sale, the Company intends to focus its business plan on the mortgage and settlement services industry through its recently acquired subsidiary, Default Servicing USA, Inc., and the subsidiary it is in contract to purchase, Timios Acquisition Corp., while continuing to operate in the homeland security industry through its subsidiaries, Nexus and PMX.
Reasons for the Sale (see page 10)
The Company intends to use the proceeds of the Sale to pay all or substantially all of the Company’s outstanding indebtedness, which, as of July 25, 2011, was in the aggregate principal amount of approximately $14,188,923 and, with accrued interest, was approximately $19,861,787 (the “ Debt ”), owed to YA Global Investment, L.P. (“ YA ”). The Debt is also secured by all of the assets of the Company and guaranteed by certain subsidiaries of the Company. The maturity date for the Debt was July 15, 2011. However, pursuant to the terms of a Forbearance Agreement dated as of July 29, 2011, YA has agreed to forbear from exercising any remedies available to it under the agreements relating to the Debt or at law or in equity until August 31, 2011. We intend to seek an extension of the forbearance period if we do not close the Sale on or before such date. If YA does not agree to extend the forbearance period, then we expect that YA would foreclose on our assets.
In addition, up to $1,000,000 of the Cash Consideration will be used by the holders of the Company’s Series I Preferred (the “ Management Investors ”) to purchase shares of PESI’s common stock (“ PESI Common Stock ”) at the closing. In exchange for the ability to purchase the PESI Common Stock and certain other consideration, the Management Investors have agreed to extinguish their rights in the Series I Preferred along with certain warrants, which the Company believes will significantly enhance its capital structure.
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