SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
October 11, 2005
EARTHSHELL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 333-13287 77-0322379
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1301 York Rd., Suite 200, Lutherville, Maryland 21093
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (410) 847-9420
3916 State St. #110, Santa Barbara, California 93105
(Former Name or Former Address, If Changed Since Last Report)
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:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On October 11, 2005, EarthShell Corporation, a Delaware corporation (the
"Company") issued a Promissory Note (the "Note") to E. Khashoggi Industries,
Inc, LLC, a Delaware limited liability company ("EKI") in the principal amount o
$1,000,000. Under the terms of the Note, EKI will advance the Company the
following sums on the following dates, or a lesser amount as the Company
requests in writing:
Amount Date of Funding
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$350,000 October 12, 2005
$250,000 October 31, 2005
$250,000 November 30, 2005
$150,999 December 31, 2005
Notwithstanding the funding schedule described above, if, on or before any
of the above funding dates, the Company receives a total of $3 million in
aggregate net cash proceeds from any combination of financing transaction,
equity contribution, sale, licensing or sublicensing of assets or the provision
of services (including, without limitation, advanced royalty payments, proceeds
from the sale of the Company's common stock and fees for technical services
rendered to third parties, but excluding any proceeds advanced under the Note),
EKI is not obligated to advance any additional funds to the Company, including
the funds that were to be advanced at the next funding date.
Interest accrues on the principal balance of the Note at a variable per
annum rate, as of any date of determination, that is equal to the rate published
in the "Money Rates" section of The Wall Street Journal as being the "Prime
Rate", compounded monthly. All accrued but unpaid interest and outstanding
principal is due and payable on the earliest to occur of the following: (i) the
second (2nd) anniversary of the date of the Note; (ii) five (5) days following
the date the Company has received $3 milllion or more in aggregate net cash
proceeds from all financing transactions, equity contributions, and transactions
relating to the sale, licensing, sublicensing or disposition of assets or the
provision of services (including advance royalty payments, proceeds from the
sale of the Company's common stock and fees for technological services rendered
to third parties), measured from the date of the Note and not taking into
account the proceeds advanced under the Note; or (iii) the occurrence of an
Event of Default (as defined in the Note).
On October 11, 2005, the Company entered into a Debt Conversion and Mutual
Release Agreement (the "Agreement") with EKI. Pursuant to the Agreement, the
Company and EKI agreed that a receivable in an amount equal to $837,145.69
(previously owed to bio-Tec Biologische Naturverpackunger GmbH & Co.KG, a
wholly-owned subsidiary of EKI, but which was subsequently assigned to EKI) be
converted into 279,048 shares of common stock of the Company. The conversion
price equals $3.00 per share. Pursuant to this Agreement, the Company and EKI
released each other from any and all claims in connection with the receivable.
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Item 3.02. Unregistered Sales of Equity Securities.
See Item 1.01 above.
Item 9.01. Financial Statements and Exhibits.
(a) Not applicable
(b) Not applicable
(c) Exhibit No. Description
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Exhibit Description Location
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Exhibit 99.1 $1,000,000 Promissory Note dated as of Provided herewith
October 11, 2005 and issued to
E. Khashoggi Industries, LLC
Exhibit 99.2 Debt Conversion and Mutual Release Provided herewith
Agreement, dated October 11, 2005,
by and between EarthShell Corporation
and E. Khashoggi Industries, LLC
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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 hereunto duly authorized.
Date: October 18, 2005 EARTHSHELL CORPORATION
By:/s/ D. Scott Houston
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Name: D. Scott Houston
Title: Chief Financial Officer
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