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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>WASHINGTON,
      D.C. 20549</strong></font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">__________________</font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>FORM
      8-K</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PURSUANT
      TO SECTION 13 OR 15(d) of the</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      EXCHANGE ACT OF 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">August
      21, 2006</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>Homeland
      Security Capital Corporation</u></strong></font></div>
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      Name of Registrant as Specified in Charter)</font></div>
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                incorporation)</font></div>
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              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
                No.)</font></div>
            </td>
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            <td width="2%">&#160;</td>
            <td valign="bottom" width="28%">
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                code)</font></div>
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          <tr>
            <td valign="bottom" width="58%">&#160;</td>
            <td width="2%">&#160;</td>
            <td valign="bottom" width="28%">&#160;</td>
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          <tr>
            <td valign="bottom" width="58%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registrant&#8217;s
                telephone number, including area code:</font></div>
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            <td width="2%">&#160;</td>
            <td valign="bottom" width="28%">
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                528-7073</strong></font></div>
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            <td valign="bottom" width="58%">&#160;</td>
            <td width="2%">&#160;</td>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong><u>__________________________</u></strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      Name or Former Address, If Changed Since Last Report)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-FAMILY: Wingdings">o</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Soliciting
      material
      pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange
      Act&#160;(17&#160;CFR&#160;240.14d-2(b))</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font face="Wingdings">o</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act&#160;
(17&#160;CFR&#160;240.13e-4(c))</font></div><br>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
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      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">&#160;</div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
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        </div>
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      <div id="HDR">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
      August
      21, 2006, Homeland Security Capital Corporation (the &#8220;Company&#8221;) entered into a
      Securities Purchase Agreement with Cornell Capital Partners, LP (&#8220;Cornell
      Capital&#8221;), which provides for the purchase by Cornell Capital of a secured
      convertible debenture (the &#8220;Debenture&#8221;) in the amount of $4,000,000. The
      Debenture is convertible into the Company&#8217;s common stock, par value $0.001 per
      share (the &#8220;Common Stock&#8221;), 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. </font></div>
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
      connection with the Securities Purchase Agreement, the Company issued a warrant
      to Cornell Capital for 100,000,000 shares of the Company&#8217;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. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      3.02. UNREGISTERED SALES OF EQUITY SECURITIES.</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">See
      Item
      1.01 above.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>ITEM
      9.01. FINANCIAL STATEMENTS AND EXHIBITS. </strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(a)
      Not
      applicable</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(b)
      Not
      applicable</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)
      Exhibit No. Description</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div align="left">
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Exhibit</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="66%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Description</strong></font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="20%">
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            </td>
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          <tr>
            <td valign="top" width="10%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="justify" valign="top" width="66%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
          </tr>
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            <td valign="top" width="10%">
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                10.1</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td align="justify" valign="top" width="66%">
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                Purchase Agreement, dated as of August 21, 2006 between the Company
                and
                Cornell Capital Partners, LP </font></div>
            </td>
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                and Security Agreement, dated as of August 21, 2006 between the Company
                and Cornell Capital Partners, LP</font></div>
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                Convertible Debenture, dated as of August 21, 2006 issued to Cornell
                Capital Partners, LP</font></div>
            </td>
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                herewith</font></div>
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            <td width="2%">&#160;</td>
            <td align="left" valign="top" width="66%">&#160;</td>
            <td width="2%">&#160;</td>
            <td align="justify" valign="top" width="20%">&#160;</td>
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            <td valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Exhibit
                10.5</font></div>
            </td>
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                LP</font></div>
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                herewith</font></div>
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    <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      Registrant has duly caused this Current Report to be signed on its behalf by
      the
      undersigned hereunto duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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          <tr>
            <td align="left" valign="top" width="42%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
                August 23, 2006</font></div>
            </td>
            <td align="left" valign="top" width="42%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
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                  SECURITY CAPITAL
                  CORPORATION</strong></font></div>
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            <td align="left" valign="top" width="42%">&#160;</td>
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            <td align="left" valign="top" width="42%">&#160;</td>
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                </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em><u>/s/
                C. Thomas
                McMillen&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
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{"company-data": {"conformed-name": "Homeland Security Capital CORP", "cik": "0001006459", "assigned-sic": "7373", "irs-number": "522050585", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-23279", "film-number": "061053328"}, "business-address": {"street1": "146 MARYVILLE PIKE", "street2": "SUITE 201", "city": "KNOXVILLE", "state": "TN", "zip": "37920", "phone": "8655393561"}, "mail-address": {"street1": "146 MARYVILLE PIKE", "street2": "SUITE 201", "city": "KNOXVILLE", "state": "TN", "zip": "37920"}, "former-company": {"former-conformed-name": "CELERITY SYSTEMS INC", "date-changed": "19970811"}}
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
August
      21, 2006
Homeland
      Security Capital Corporation
(Exact
      Name of Registrant as Specified in Charter)
Delaware
814-00631
52-2050585
(State
                or other jurisdiction
(Commission
(IRS
                Employer
of
                incorporation)
File
                Number)
Identification
                No.)
4100
                North Fairfax Drive, Suite 1150, Arlington, Virginia
22203-1664
(Address
                of principal executive offices)
(Zip
                code)
Registrant's
                telephone number, including area code:
(703)
                528-7073
__________________________
(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:
o
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
o
Soliciting
      material
      pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange
      Act (17 CFR 240.14d-2(b))
o
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
      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.
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
Exhibit
Description
Location
Exhibit
                10.1
Securities
                Purchase Agreement, dated as of August 21, 2006 between the Company
                and
                Cornell Capital Partners, LP
Provided
                herewith
Exhibit
                10.2
Investor
                Registration Rights Agreement, dated as of August 21, 2006 between
                the
                Company and Cornell Capital Partners, LP
Provided
                herewith
Exhibit
                10.3
Pledge
                and Security Agreement, dated as of August 21, 2006 between the Company
                and Cornell Capital Partners, LP
Provided
                herewith
Exhibit
                10.4
Secured
                Convertible Debenture, dated as of August 21, 2006 issued to Cornell
                Capital Partners, LP
Provided
                herewith
Exhibit
                10.5
Warrant
                dated as of August 21, 2006 issued to Cornell Capital Partners,
                LP
Provided
                herewith
2
SIGNATURES
Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, the
      Registrant has duly caused this Current Report to be signed on its behalf by
      the
      undersigned hereunto duly authorized.
Date:
                August 23, 2006
HOMELAND
                  SECURITY CAPITAL
                  CORPORATION
By:
/s/
                C. Thomas
                McMillen
Name:
C.
                Thomas McMillen
Title:  
                President and Chief Executive
                Officer
3