CHMS 8-K 05/04/2006
UNITED
STATES
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 (Date of earliest event reported: May 4, 2006
CHINA
MOBILITY SOLUTIONS, INC.
(Exact
name of registrant as specified in its charter)
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Florida
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000-26559
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330-751560
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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#900
- 789 West Pender Street, Vancouver, B.C. Canada V6C 1H2
(Address
of principal executive offices) (Postal Code)
Registrant's
telephone number, including area code: (604) 632-9638
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 (see General Instruction A.2. below):
[_]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[_]
Soliciting material pursuant to Rule 14a-12 under Exchange Act (17 CFR
240.14a-12)
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange
Act
(17
CFR240.14d-2(b))
[_]
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange
Act
(17
CFR240.13e-4(c))
Item
1.01 Entry
Into a Material Definitive Agreement.
On
January 18, 2006, China Mobility Solutions, Inc. (the “Company”) received a
letter (the “Default Notice”) from the attorney for Southridge Partners,
LP, (the “Lender”) the holder of $500,000 principal amount of the Company's
Senior Convertible Debentures (the “Debenture”) stating that the
Company was in default of certain transaction agreements (the “Transaction
Agreements”) issued in connection with the Debenture by virtue of the Company's
issuance of registered shares of stock to employees and consultants under a
Form
S-8 registration statement and the filing of the Form S-8 prior to the date
of
effectiveness (the “Effective Date”) of the Company’s SB-2 Registration
Statement required under the Registration Rights Agreement (one of the
Transaction Agreements).
The
Company denied that it was in default of the Transaction Agreements; however,
in
order to avoid costly litigation, the parties entered into a waiver/settlement
agreement as of May 4, 2006 (the “Waiver/Settlement Agreement”).
The
Debenture was issued on August 15, 2005, as part of a $3,350,000 offering of
units. Under the original terms of the Debenture, each unit included $25,000
principal amount of Debentures, initially convertible at $.35 per share, matured
on August 15, 2006 and accrued interest at not less than 6% per annum equal
to
the sum of 2% per annum plus the one month LIBOR rate. Each unit also included
Class A Warrants exercisable at $.44 per share and Class B Warrants exercisable
at $.52 per share.
In
accordance with the terms of the Waiver/Settlement Agreement, the initial
conversion price of the Debenture was reduced from $.35 per share to $.30 per
share, the Class A Warrant exercise price was reduced from $.44 to $.38 per
share and the Class B Warrant exercise price was reduced from $.52 to $.45
per
share. In addition, the number of shares of the Company’s common stock
exercisable upon conversion of each $25,000 principal amount of Debenture and
upon exercise of the Class A and Class B Warrants included in each Unit was
increased from 71,429 shares to 83,333 shares for each of the Debenture, Class
A
Warrants and Class B Warrants, or an aggregate of 250,000 shares per unit.
The
Lender waived the S-8 Default set forth in the Default Notice and the Company
agreed not to file any additional S-8 Registration Statements prior to 45 days
after the Effective Date.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
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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CHINA
MOBILITY SOLUTIONS, INC.
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(Registrant)
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Date:
May 9, 2006
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By: /s/
Angela
Du
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Angela
Du, President
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