<html>
  <head>
    <title>
</title>
</head>
  <body bgcolor="#ffffff">
    <div>
      <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
      <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
    </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">SECURITIES
      AND EXCHANGE COMMISSION</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">WASHINGTON,
      D.C. 20549</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="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">CURRENT
      REPORT</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">PURSUANT
      TO SECTION 13 OR 15(d) OF THE</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">SECURITIES
      EXCHANGE ACT OF 1934</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">Date
      of
      Report:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</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">February
      28, 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: 18pt; FONT-FAMILY: Times New Roman">ARIEL
      WAY, INC.&#160;</font>&#160;</div>
    <div>
      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
    </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">(Exact
      Name of Registrant as Specified in Charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="top" width="32%">
              <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">Florida</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="32%">
              <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">0-50051</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="32%">
              <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">65-0983277</font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="32%">
              <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">(State
                of Incorporation)</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="32%">
              <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">(Commission
                File Number )</font></div>
            </td>
            <td width="2%">&#160;</td>
            <td valign="top" width="32%">
              <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">(IRS
                Employer Identification No.)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: -9pt; 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">8000
      Towers Crescent Drive, Suite 1220</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">Vienna,
      VA 22182&#160;</font>&#160;</div>
    <div>
      <hr style="COLOR: black" align="left" noshade size="1" width="100%">
    </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">(Address
      of principal executive offices) (Zip Code)</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">(703)
      918-2430 </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
      <div>
        <hr style="COLOR: black" align="left" noshade size="1" width="100%">
      </div>
    </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">(Registrant's
      telephone number, including area code)</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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the
      appropriate box below if the Form 8-K is intended to simultaneously satisfy
      the
      filing obligation of the registrant under any of the following provisions
      (</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><em>see</em></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      General
      Instruction A.2 below):</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 18pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Wingdings">o</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c)) </font></div>
            </td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
      <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
    </div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </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="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="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font size="2">On
      February 28, 2006, pursuant to an Investment
      Agreement (the &#8220;Agreement&#8221;) by and between Ariel Way, Inc. ("Ariel Way") and
      Cornell Capital Partners, LP, a Delaware limited partnership and Montgomery
      Equity Partners, Ltd., a Cayman Islands exempted Company (individually referred
      to as &#8220;Cornell&#8221; and &#8220;Montgomery&#8221; and collectively referred to as the &#8220;Buyers&#8221;),
      Ariel Way sold and issued to the Buyers one hundred sixty (160) Series A
      Preferred Shares for a consideration consisting solely of the surrender of
      certain Prior Securities as defined below.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <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">Cornell
        has purchased from the Company the following securities: (i) a 12% promissory
        note dated February 2, 2005 in the original principal amount of Four Hundred
        Thousand Dollars ($400,000) plus Fifty Two Thousand Dollars ($52,000) of
        outstanding and accrued interest for a total amount due of Four Hundred Fifty
        Two Thousand Dollars ($452,000) and (ii) 5% Secured Convertible Debenture
        originally dated September 30, 2004 and amended and restated on July 21,
        2005 in
        the original principal amount of Five Hundred Thousand Dollars ($500,000)
        plus
        Ten Thousand Five Hundred Fifty Six Dollars ($10,556) of outstanding and
        accrued
        interest for a total amount due of Five Hundred Ten Thousand Five Hundred
        Fifty
        Six Dollars ($510,556) (collectively referred to as the &#8220;Cornell Prior
        Securities&#8221;).&#160;</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Montgomery
        has purchased from the Company the following securities: a 12% promissory
        note
        dated July 28, 2005 in the original principal amount of Six Hundred Thousand
        Dollars ($600,000) plus Forty Two Thousand Four Hundred Ten Dollars and Ninetty
        Six Cents ($42,410.96) amount of outstanding and accrued interest for a total
        amount due of Six Hundred Forty Two Thousand Four Hundred Ten Dollars and
        Ninety
        Six Cents ($642,410.96) (referred to as the &#8220;Montgomery Prior
        Securities&#8221;).&#160; (Collectively the &#8220;Cornell Prior Securities&#8221; and the
&#8220;Montgomery Prior Securities&#8221; are referred to as the &#8220;Prior
        Securities&#8221;).</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
        Prior
        Securites as defined above have been cancelled as a result of the sale of
        the
        Series A Preferred Shares to the Buyers.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
      to authority conferred upon the Board of Directors of Ariel Way, Inc. (&#8220;Ariel
      Way&#8221;), a corporation organized and existing under the Florida Business
      Corporations Act, as amended, Ariel Way by the&#160;Articles of Incorporation of
      the Corporation, as in effect as of the date hereof, the Board of Directors
      of
      Ariel Way, by action duly taken by written consent in lieu of a meeting adopted
      resolutions creating a new series </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">of
      one
      hundred sixty five (165) of certain Series A Convertible Preferred Shares par
      value $0.001 per share (the "Series A Preferred Shares"), par value $0.001
      per
      share, </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">out
      of
      Ariel Way&#8217;s previously authorized Preferred Stock, which resolutions remain in
      full force and effect on the date hereof</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      and an
      issuance, to consist of one hundred sixty (160) shares, and hereby fixes the
      powers, designations, preferences, and relative, participating, optional and
      other special rights of the shares of such Series A Preferred Shares, as
      follows</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
      </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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ariel
      Way
      filed on March 6, 2006 with the Florida Secretary of State a Certificate of
      Designation providing the terms and conditions of the Ariel Way Series A
      Convertible Preferred Stock.</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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Holders of Series A Preferred Shares shall be entitled to receive dividends
      or
      distributions on a pro rata basis according to their holdings of shares of
      Series A Preferred Shares when and if declared by the Board of Directors of
      the
      Company in the amount of five (5.0%) percent per year. Dividends shall be paid
      in cash. Dividends shall be cumulative. No cash dividends or distributions
      shall
      be declared or paid or set apart for payment on the Common Stock in any calendar
      year unless cash dividends or distributions on the Series A Preferred Stock
      for
      such calendar year are likewise declared and paid or set apart for payment.
      No
      declared and unpaid dividends shall bear or accrue interest.</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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Upon
      any
      liquidation, dissolution, or winding up of the Company, whether voluntary or
      involuntary (collectively, a &#8220;Liquidation&#8221;), before any distribution or payment
      shall be made to any of the holders of Common Stock or any series of Preferred
      Shares, the holders of Series A Preferred Shares shall be entitled to receive
      out of the assets of the Company, whether such assets are capital, surplus
      or
      earnings, an amount equal to Ten Thousand Thirty One Dollars and Four Cents
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">($10,031.04)
      </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">per
      share
      of Series A Preferred Shares (the &#8220;Liquidation Amount&#8221;) plus all declared and
      unpaid dividends thereon, for each share of Series A Preferred Shares held
      by
      them.</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="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">If,
      upon
      any Liquidation, the assets of the Company shall be insufficient to pay the
      Liquidation Amount, together with declared and unpaid dividends thereon, in
      full
      to all holders of Series A Preferred Shares, then the entire net assets of
      the
      Corporation shall be distributed among the holders of the Series A Preferred
      Shares, ratably in proportion to the full amounts to which they would otherwise
      be respectively entitled and such distributions may be made in cash or in
      property taken at its fair value (as determined in good faith by the Company&#8217;s
      Board of Directors), or both, at the election of the Company&#8217;s Board of
      Directors.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Series A Preferred Shares shall have registration rights pursuant to a certain
      Investor&#8217;s Registration Rights Agreement dated the February 28,
      2006.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></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">In
      lieu
      of payment on the Maturity Date as outlined herein the Holders of Series A
      Preferred Shares shall have sole right and in their discretion to elect
      conversion pursuant to the conversion rights, at any time and from time to
      time
      at their sole discretion, as follow (the "Conversion Rights"): </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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">(</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">a</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      share of Series A Preferred Shares shall be convertible, at the option of the
      holder thereof, at any time after the date of issuance of such share, at the
      office of the Company&#8217;s transfer agent, pursuant to the Irrevocable Transfer
      Agent Instructions dated the date hereof, for the Series A Preferred Stock
      into
      such number of fully paid and non-assessable shares of Common Stock equal to
      the
      quotient of the Liquidation Amount divided by the Conversion Price. The
      Conversion Price shall be equal to, the lesser of at the option of the Buyers
      either: i) Ten Cents ($0.10) or ii) ninety five percent (95%) of the lowest
      volume weighted average price of the Common Stock for the twenty (20) trading
      days immediately preceding the date of conversion, as quoted Bloomberg
      LP.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></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)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
      the
      Option of the Holders, if there are outstanding Series A Preferred Shares on
      February 28, 2008, each share of Series A Preferred Stock shall convert into
      shares of Common Stock at the Conversion Price then in effect on February 28,
      2008. </font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 72pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Each
      share of Series A Preferred Shares automatically shall convert into shares
      of
      Common Stock at the Conversion Price then in effect immediately upon the
      consummation of the occurrence of a stock acquisition, merger, consolidation
      or
      reorganization of the Company into or with another entity through one or a
      series of related transactions, or the sale, transfer or lease (but not
      including a transfer by pledge or mortgage to a bona fide lender) of all or
      substantially all of the assets of the Company.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Conversion Price of the Series A Preferred Shares as described above shall
      be
      adjusted from time to time pursuant to the terms and conditions of the Ariel
      Way
      Series A Convertible Preferred Stock.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
      copy of
      the various supporting documents related to the Series A Preferred Shares are
      attached as exhibit under Item 9.01(c) of this report.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>&#160;</div>
    <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&#160;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="left">&#160;</div>
    <div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 36pt;"><font size="2">(c)&#160;&#160;<font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;</font></font></td>
              <td align="left"><font size="2">Exhibits Furnished.
</font></td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 36pt;">&#160;</td>
              <td align="left">&#160;</td>
            </tr>

        </table>
      </div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

            <tr valign="top" style="line-height: 1.25;">
              <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></td>
              <td align="left">
                <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ariel
                  Way, Inc. Certificate of Designation, as filed with Florida Secretary
                  of
                  State - Series A Convertible Preferred Stock, dated February 28,
                  2006.
                  </font></div>
              </td>
            </tr>

        </table>
      </div>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.2</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investment
                Agreement </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                and between Cornell Capital Partners, LP, Montgomery Equity Partners,
                Ltd., and</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                Ariel Way, Inc., dated February 28,
                2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.3</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Registration
                Rights Agreement </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                and between Cornell Capital Partners, LP, Montgomery Equity Partners,
                Ltd., and</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                Ariel Way, Inc., dated February 28,
                2006.</font></div>
            </td>
          </tr>

      </table>
    </div>
    <div>
      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">

          <tr valign="top" style="line-height: 1.25;">
            <td align="left" style="width: 36pt;"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.4</font></td>
            <td align="left">
              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Irrevocable
                Transfer Agent Instructions </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">by
                and between </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ariel
                Way, Inc., and </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Florida
                Atlantic Stock Transfer, Inc. </font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">dated
                February 28, 2006.</font></div>
            </td>
          </tr>

      </table>
    </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="center"><br></div>
    <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
      <div id="FTR">
        <div id="GLFTR" style="WIDTH: 100%" align="left">
        </div>
      </div>
      <div id="PN" style="PAGE-BREAK-AFTER: always">
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
        </div>
        <div style="WIDTH: 100%; TEXT-ALIGN: center">
          <hr style="COLOR: black" noshade size="2">
        </div>
      </div>
      <div id="HDR">
        <div id="GLHDR" style="WIDTH: 100%" align="right">
        </div>
      </div>
    </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">SIGNATURES</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="left"><br></div>
    <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">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.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
      <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

          <tr valign="top" bgcolor="#ffffff">
            <td width="50%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="1%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td width="49%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">ARIEL
              WAY,
              INC.</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<br>&#160;</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Date:&#160;March
              3, 2006</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:&#160;&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;Arne
              Dunhem</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="FONT-FAMILY: " size="1">&#160;</font></td>
            <td align="left">
              <hr style="COLOR: black" align="left" noshade size="2" width="80%"><font size="2">Name:
</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Arne
              Dunhem</font></td>
          </tr>
          <tr valign="top" bgcolor="#ffffff">
            <td colspan="2"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
            <td><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">Title:
              President and Chief Executive
              Officer</font></td>
          </tr>

      </table>
    </div>
  </body>
</html>
{"company-data": {"conformed-name": "ARIEL WAY INC", "cik": "0001145254", "assigned-sic": "6794", "irs-number": "650983277", "state-of-incorporation": "FL", "fiscal-year-end": "0930"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-50051", "film-number": "06666995"}, "business-address": {"street1": "8000 TOWERS CRESCENT DRIVE,SUITE 1220", "city": "VIENNA", "state": "VA", "zip": "22182", "phone": "(703) 918-2420"}, "mail-address": {"street1": "8000 TOWERS CRESCENT DRIVE,SUITE 1220", "city": "VIENNA", "state": "VA", "zip": "22182"}, "former-company": [{"former-conformed-name": "ARIELWAY", "date-changed": "20050815"}, {"former-conformed-name": "NETFRAN DEVELOPMENT CORP", "date-changed": "20010718"}]}
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:
February
      28, 2006
ARIEL
      WAY, INC.
(Exact
      Name of Registrant as Specified in Charter)
Florida
0-50051
65-0983277
(State
                of Incorporation)
(Commission
                File Number )
(IRS
                Employer Identification No.)
8000
      Towers Crescent Drive, Suite 1220
Vienna,
      VA 22182
(Address
      of principal executive offices) (Zip Code)
(703)
      918-2430
(Registrant's
      telephone number, including area code)
Check
      the
      appropriate box below if the Form 8-K is intended to simultaneously satisfy
      the
      filing obligation of the registrant under any of the following provisions
      (
see
General
      Instruction A.2 below):
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
      February 28, 2006, pursuant to an Investment
      Agreement (the "Agreement") by and between Ariel Way, Inc. ("Ariel Way") and
      Cornell Capital Partners, LP, a Delaware limited partnership and Montgomery
      Equity Partners, Ltd., a Cayman Islands exempted Company (individually referred
      to as "Cornell" and "Montgomery" and collectively referred to as the "Buyers"),
      Ariel Way sold and issued to the Buyers one hundred sixty (160) Series A
      Preferred Shares for a consideration consisting solely of the surrender of
      certain Prior Securities as defined below.
Cornell
        has purchased from the Company the following securities: (i) a 12% promissory
        note dated February 2, 2005 in the original principal amount of Four Hundred
        Thousand Dollars ($400,000) plus Fifty Two Thousand Dollars ($52,000) of
        outstanding and accrued interest for a total amount due of Four Hundred Fifty
        Two Thousand Dollars ($452,000) and (ii) 5% Secured Convertible Debenture
        originally dated September 30, 2004 and amended and restated on July 21,
        2005 in
        the original principal amount of Five Hundred Thousand Dollars ($500,000)
        plus
        Ten Thousand Five Hundred Fifty Six Dollars ($10,556) of outstanding and
        accrued
        interest for a total amount due of Five Hundred Ten Thousand Five Hundred
        Fifty
        Six Dollars ($510,556) (collectively referred to as the "Cornell Prior
        Securities").
Montgomery
        has purchased from the Company the following securities: a 12% promissory
        note
        dated July 28, 2005 in the original principal amount of Six Hundred Thousand
        Dollars ($600,000) plus Forty Two Thousand Four Hundred Ten Dollars and Ninetty
        Six Cents ($42,410.96) amount of outstanding and accrued interest for a total
        amount due of Six Hundred Forty Two Thousand Four Hundred Ten Dollars and
        Ninety
        Six Cents ($642,410.96) (referred to as the "Montgomery Prior
        Securities").  (Collectively the "Cornell Prior Securities" and the
"Montgomery Prior Securities" are referred to as the "Prior
        Securities").
All
        Prior
        Securites as defined above have been cancelled as a result of the sale of
        the
        Series A Preferred Shares to the Buyers.
Pursuant
      to authority conferred upon the Board of Directors of Ariel Way, Inc. ("Ariel
      Way"), a corporation organized and existing under the Florida Business
      Corporations Act, as amended, Ariel Way by the Articles of Incorporation of
      the Corporation, as in effect as of the date hereof, the Board of Directors
      of
      Ariel Way, by action duly taken by written consent in lieu of a meeting adopted
      resolutions creating a new series
of
      one
      hundred sixty five (165) of certain Series A Convertible Preferred Shares par
      value $0.001 per share (the "Series A Preferred Shares"), par value $0.001
      per
      share,
out
      of
      Ariel Way's previously authorized Preferred Stock, which resolutions remain in
      full force and effect on the date hereof
and an
      issuance, to consist of one hundred sixty (160) shares, and hereby fixes the
      powers, designations, preferences, and relative, participating, optional and
      other special rights of the shares of such Series A Preferred Shares, as
      follows
.
Ariel
      Way
      filed on March 6, 2006 with the Florida Secretary of State a Certificate of
      Designation providing the terms and conditions of the Ariel Way Series A
      Convertible Preferred Stock.
The
      Holders of Series A Preferred Shares shall be entitled to receive dividends
      or
      distributions on a pro rata basis according to their holdings of shares of
      Series A Preferred Shares when and if declared by the Board of Directors of
      the
      Company in the amount of five (5.0%) percent per year. Dividends shall be paid
      in cash. Dividends shall be cumulative. No cash dividends or distributions
      shall
      be declared or paid or set apart for payment on the Common Stock in any calendar
      year unless cash dividends or distributions on the Series A Preferred Stock
      for
      such calendar year are likewise declared and paid or set apart for payment.
      No
      declared and unpaid dividends shall bear or accrue interest.
Upon
      any
      liquidation, dissolution, or winding up of the Company, whether voluntary or
      involuntary (collectively, a "Liquidation"), before any distribution or payment
      shall be made to any of the holders of Common Stock or any series of Preferred
      Shares, the holders of Series A Preferred Shares shall be entitled to receive
      out of the assets of the Company, whether such assets are capital, surplus
      or
      earnings, an amount equal to Ten Thousand Thirty One Dollars and Four Cents
($10,031.04)
per
      share
      of Series A Preferred Shares (the "Liquidation Amount") plus all declared and
      unpaid dividends thereon, for each share of Series A Preferred Shares held
      by
      them.
If,
      upon
      any Liquidation, the assets of the Company shall be insufficient to pay the
      Liquidation Amount, together with declared and unpaid dividends thereon, in
      full
      to all holders of Series A Preferred Shares, then the entire net assets of
      the
      Corporation shall be distributed among the holders of the Series A Preferred
      Shares, ratably in proportion to the full amounts to which they would otherwise
      be respectively entitled and such distributions may be made in cash or in
      property taken at its fair value (as determined in good faith by the Company's
      Board of Directors), or both, at the election of the Company's Board of
      Directors.
The
      Series A Preferred Shares shall have registration rights pursuant to a certain
      Investor's Registration Rights Agreement dated the February 28,
      2006.
In
      lieu
      of payment on the Maturity Date as outlined herein the Holders of Series A
      Preferred Shares shall have sole right and in their discretion to elect
      conversion pursuant to the conversion rights, at any time and from time to
      time
      at their sole discretion, as follow (the "Conversion Rights"):
(
a
)
Each
      share of Series A Preferred Shares shall be convertible, at the option of the
      holder thereof, at any time after the date of issuance of such share, at the
      office of the Company's transfer agent, pursuant to the Irrevocable Transfer
      Agent Instructions dated the date hereof, for the Series A Preferred Stock
      into
      such number of fully paid and non-assessable shares of Common Stock equal to
      the
      quotient of the Liquidation Amount divided by the Conversion Price. The
      Conversion Price shall be equal to, the lesser of at the option of the Buyers
      either: i) Ten Cents ($0.10) or ii) ninety five percent (95%) of the lowest
      volume weighted average price of the Common Stock for the twenty (20) trading
      days immediately preceding the date of conversion, as quoted Bloomberg
      LP.
(b)
At
      the
      Option of the Holders, if there are outstanding Series A Preferred Shares on
      February 28, 2008, each share of Series A Preferred Stock shall convert into
      shares of Common Stock at the Conversion Price then in effect on February 28,
      2008.
(c)
Each
      share of Series A Preferred Shares automatically shall convert into shares
      of
      Common Stock at the Conversion Price then in effect immediately upon the
      consummation of the occurrence of a stock acquisition, merger, consolidation
      or
      reorganization of the Company into or with another entity through one or a
      series of related transactions, or the sale, transfer or lease (but not
      including a transfer by pledge or mortgage to a bona fide lender) of all or
      substantially all of the assets of the Company.
The
      Conversion Price of the Series A Preferred Shares as described above shall
      be
      adjusted from time to time pursuant to the terms and conditions of the Ariel
      Way
      Series A Convertible Preferred Stock.
A
      copy of
      the various supporting documents related to the Series A Preferred Shares are
      attached as exhibit under Item 9.01(c) of this report.
Item 9.01
      Financial Statements and Exhibits.
(c)
Exhibits Furnished.
99.1
Ariel
                  Way, Inc. Certificate of Designation, as filed with Florida Secretary
                  of
                  State - Series A Convertible Preferred Stock, dated February 28,
                  2006.
99.2
Investment
                Agreement
by
                and between Cornell Capital Partners, LP, Montgomery Equity Partners,
                Ltd., and
Ariel Way, Inc., dated February 28,
                2006.
99.3
Registration
                Rights Agreement
by
                and between Cornell Capital Partners, LP, Montgomery Equity Partners,
                Ltd., and
Ariel Way, Inc., dated February 28,
                2006.
99.4
Irrevocable
                Transfer Agent Instructions
by
                and between
Ariel
                Way, Inc., and
Florida
                Atlantic Stock Transfer, Inc.
dated
                February 28, 2006.
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.
ARIEL
              WAY,
              INC.
Date: March
              3, 2006
By:
/s/ Arne
              Dunhem
Name:
Arne
              Dunhem
Title:
              President and Chief Executive
              Officer