8-K

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): October 16, 2008

ETHOS ENVIRONMENTAL, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-30237	88-0467241
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification Number)
	6800 Gateway Park Drive San Diego, CA 92154
	(Address of principal executive offices)
	619-575-6800
	(Registrant’s Telephone Number)

 (Former name or former address, if changed since last report)

Copy of all Communications to:

Luis Carrillo, Esq.

SteadyLaw Group, LLP

501 W. Broadway, Suite 800

San Diego, CA 92101

phone: 619.399.3090

fax: 619.330.1888

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))

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Item 1.01 Entry Into Material Definitive Agreement

On October 16, 2008, Ethos Environmental, Inc., a Nevada corporation, (the “Registrant” or the “Company”), entered into a Settlement Agreement and General Mutual Release (the “Settlement Agreement”) with GreenBridge Capital Partners, IV, LLC, a Delaware limited liability company, (“GBCP”).

Per the terms of a Registration Rights Agreement dated August 7, 2007, filed via Form 8-K on August 13, 2007 and incorporated by reference herein, the Company agreed to pay certain liquidated damages to GBCP if  2,500,000 shares (the “GBCP Stock”) purchased by GBCP were not registered by February 15, 2008.

To date, the GBCP Stock has not been registered and GBCP has received 2,265,428 shares of the Registrant’s common stock as liquated damages per the terms of the Registration Rights Agreement.  In excahnge for cancellation of the Registration Rights Agreement, GBCP has agreed to accept 10,200,000 additional shares of Company common stock.

The Managing Member of GBCP is Corey P. Schlossmann, our interim Chief Executive Officer, President, Secretary and Chairman.  Mr. Schlossmann abstained from the vote of the Board of Directors pertaining to the Settlement Agreement.

The foregoing description of the Settlement Agreement does not purport to be complete and is qualified in its entirety by reference to the agreement, a copy of which is filed as Exhibit 99.1, and incorporated by reference.

Item 1.02 Termination of a Material Definitive Agreement

Item 1.01 is incorporated by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On September 11, 2008, in exchange for the surrender and cancellation of 13,600,000 shares of the Company’s common stock (the “Stock”) held by Enrique de Vilmorin, the Company agreed to assume a $500,000 secured promissory note (the “Old Note”) payable by Mr. de Vilmorin to Newport Investment Group Ltd (“Newport”). The 13,600,000 shares represented Mr. de Vilmorin’s entire position in the Company.

In furtherance of the Assumption Agreement, on October 16, 2008, the Company issued a new promissory note (the “New Note”) in the original principal amount of $500,000 to Newport. The New Note is due on October 1, 2009, and bears interest at the rate of 10% per annum.  Newport agreed to waive all of its rights under the Old Note, including all rights to the Stock.

The foregoing description of the Assumption Agreement and the New Note are not complete and are qualified in their entirety by reference to the Assumption Agreement and the New Note, which are attached as Exhibits 99.2 and 99.3, respectively.

ITEM 4.02. NONRELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW

On October 16, 2008, the Company concluded that all previously reported consolidated financial statements filed since, and including, our annual report for the year ended December 31, 2006 should no longer be relied upon. 

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The Board of Directors directed a review of the Company’s prior revenue recognition practices with a focus on the accounting treatment for various transactions, in particular the accounting treatment for certain accounts receivable, including associated revenues, and the accounting treatment for certain transactions involving the sale of stock in 2006.

In addition, the Board of  Directors authorized an internal review of other transactions involving Mr. de Vilmorin.

The Company has discussed the Board’s concerns with the Company’s current and former independent public accountants.  As a result of the Board’s decision to conduct an inquiry of the Company’s financial operations, the previously issued financial statements and related reports of independent public accountants should no longer be relied upon.  Due to the incomplete information in its possession, the Company is not presently able to respond to inquiries or provide further information related to the financial statements. It is expected that the Company will publish restated financial statements at the conclusion of the review.

Until we have completed our inquiry and determined the requirements for restating previously issued financial statements and the effects of such potential restatement for the applicable periods discussed above, investors and other users are cautioned not to rely on our financial statements.

Item 7.01 Regulation FD Disclosure

A press release dated October 20, 2008 is attached hereto as Exhibit 99.4.

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Item 9.01 Financial Statements and Exhibits

(a) Not applicable

(b) Not applicable

(c) Not applicable

(d) Exhibits.

Exhibit No.	Description
99.1	Settlement Agreement
99.2	Assumption Agreement
99.3	Promissory Note
99.4	Press Release dated October 20, 2008

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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 thereunto duly authorized.

	Ethos Environmental, Inc.
Date: October 20, 2008	By:	/s/ Corey P. Schlossmann
		Corey P. Schlossmann,
		Interim President & CEO

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EX-99.1

SETTLEMENT AGREEMENT AND

GENERAL MUTUAL RELEASE

This Settlement Agreement and General Mutual Release (“Agreement”) is made and entered into as of October 16, 2008, by and between Ethos Environmental, Inc., a Nevada corporation, (“ETHOS”) and GreenBridge Capital Partners, IV, LLC, a Delaware limited liability company, (“GBCP”).  ETHOS and GBCP are sometimes referred to herein as “Party” or “Parties”.

RECITALS

The Parties execute this Agreement with reference to and in contemplation of the following facts:

1.           On August 7, 2007, Ethos entered into a Commercial Property Purchase Agreement and Joint Escrow Instructions (the “Property Sale Agreement”) with GBCP. The Property Sale Agreement provided for the sale of the Ethos’ facility (the “Premises”), located at 6800 Gateway Park Drive in San Diego, California, to GBCP for a price of $7,875,000 in cash (the “Purchase Price”).

2.           As part of the Property Sale Agreement, and in consideration of the Purchase Price, Ethos also entered into a Subscription Agreement (the “Subscription Agreement”) with GBCP for the sale of 2,500,000 shares of its common stock (the “Shares”) in a private placement. The Purchase Price was allocated as follows: (1) $5,875,000 to the purchase of the Premises and (2) $2,000,000 to the purchase of the Shares.

4.           Pursuant to a Registration Rights Agreement (the “Registration Rights Agreement”) between Ethos and GBCP executed simultaneously to the Subscription Agreement, Ethos agreed to register the Shares for resale under the Securities Act.

5.           The Registration Rights Agreement further provided that in the event that Ethos did not obtain a Notice of Effectiveness from the Securities and Exchange Commission ("SEC") registering the Shares for resale on or before February 15, 2008 (the "Filing Deadline"), GBCP would be entitled to a liquidated damages payment, subject to the terms and conditions of the Registration Rights Agreement, for each 30-day period after the Filing Deadline during which such registration statement has not been declared effective by the SEC.

6.           As of October 6, 2008, GBCP has received 2,265,428 shares of Ethos common stock per the terms of the Registration Rights Agreement, with such shares representing liquidated damages for the months of February, March, April and May 2008.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which is acknowledged, the Parties covenant and agree as follows:

A.Payment.  ETHOS shall pay to GBCP 10,200,000 shares of Ethos common stock simultaneously to the execution of this Agreement.

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B.Attorneys’ Fees.  In the event of any action or proceeding instituted between the Parties in connection with any breach of this Agreement, the prevailing Party shall be entitled to recover from the losing Party all of the prevailing Party’s litigation costs and expenses, including attorneys’ fees and non-statutory costs.

C.Each Party to Bear Previous Fees and Costs.  Except as otherwise set forth herein, each Party hereto shall be responsible for payment of its own attorneys’ fees, costs, and all other expenses incurred at any time with respect to the underlying action, subsequent discussions and negotiations, and the drafting of this Agreement.

D.No Waiver.  The waiver by any party of the performance of any covenant, condition, promise or breach shall not invalidate this Agreement, nor shall it waive that Party’s or any other Party’s right to future performance of such covenant, condition or promise.  The failure to pursue or the delay in pursuing any remedy or in insisting upon full performance any covenant, condition or promise shall not prevent a party from later pursuing remedies or insisting upon full performance for the same or similar defaults, breaches or failures.

E.Notices.  All notices, approvals, requests, demands and other communications required or permitted to be given under this Agreement shall be in writing and shall either be delivered in writing personally or sent by overnight mail delivery or sent by certified first class mail, postage prepaid, deposited in the United States mail, and properly addressed to the Party at its address below, or at any other address that such Party may designate by written notice to the other Parties, with copies to the counsel at the addresses shown below, or to such other counsel as the Parties may designate by written notice to the other Parties.  Notice shall be effective immediately upon personal delivery, after five (5) calendar days if made by regular mail or after two (2) business days if given by overnight mail or by facsimile.

If to ETHOS:	Ethos Environmental, Inc. Attn: Thomas Maher 6800 Gateway Park Drive San Diego, CA  92154 Fax: (619) 575-9300
If to GBCP:	GreenBridge Capital Partners, IV, LLC Attn: Corey P. Schlossmann 20130 Via Cellini Porter Ranch, CA 91326 Fax: (310) 820-5354

F.Mutual Release.  GBCP, on the one hand, and ETHOS, on the other hand, for themselves and their respective predecessors, successors, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, attorneys, and all others claiming by or through them hereby release and forever discharge each other and their respective predecessors, successors, affiliated entities, subsidiaries, parent companies, affiliates, officers, directors, principals, partners, employees, executors, beneficiaries, representatives, agents, assigns, and attorneys from any and all claims, causes of action, suits, proceedings, debts, contracts, controversies, claims and demands of any kind, nature or description, that were alleged, or could have been alleged, with respect to the Registration Rights Agreement and all related documents, whether based upon a tort, contract or other theory of recovery, and whether for compensatory damages, punitive damages or other relief in law, equity or otherwise.

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G.Release of Unknown Claims Arising from Actions.  The Parties acknowledge that they are familiar with Section 1542 of the California Civil Code, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

The Parties expressly waive and relinquish any and all rights and benefits which they may have under, or which may be conferred upon them by the provisions of Section 1542 of the California Civil Code, as well as under any other similar state or federal statute or common law principle, with respect to all claims alleged, or that could have been alleged, with respect to the Registration Rights Agreement and all related documents.  The Parties acknowledge that such waiver shall not prevent the Parties from seeking damages against the other resulting from a breach of this Agreement.

H.Entire Agreement; No Oral Modification. This Agreement constitutes the complete and entire written agreement of compromise, settlement and release between the Parties and constitutes the complete expression of the terms of the settlement. All prior and contemporaneous agreements, representations, and negotiations are superseded and merged herein. The terms of this Agreement can only be amended or modified by a writing, signed by duly authorized representatives of all Parties hereto, expressly stating that such modification or amendment is intended.

I.Future Actions.  The Parties hereto agree that, for their respective selves, heirs, executors and assigns, they will abide by this Agreement, which terms are meant to be contractual, and further agree that they will do such acts and prepare, execute and deliver such documents as may reasonably be required in order to carry out the purposes and intents of this Agreement.

J.Authority to Execute.  Each Party executing this Agreement represents that it is authorized to execute this Agreement. Each person executing this Agreement on behalf of an entity, other than an individual executing this Agreement on his or her own behalf, represents that he or she is authorized to execute this Agreement on behalf of said entity.

K.Warranty Against Assignment.  The Parties represent and warrant to each other that they have not and will not encumber, assign or transfer or purport to encumber, assign or transfer, in whole or in part, to any person, firm or corporation whatsoever, any claim, debt, liability, demand, obligation, cost, expense, damage, action or cause of action herein released or settled.

L.Binding on Successors.  This Agreement shall inure to the benefit of and shall be binding upon the Parties hereto and their respective heirs, executors, successors, and assigns.

M.Construction of Agreement.  The Parties and their counsel have reviewed and negotiated this Agreement, and the normal rule of construction to the effect that any ambiguities in an agreement are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

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N.Headings.  Headings are informational only and shall not be used to interpret this Agreement.

O.Voluntary Agreement.  The Parties have read this Agreement, have had the benefit of counsel and freely and voluntarily enter into this Agreement.

P.Tax Consequences.  The Parties to this Agreement acknowledge and understand that there may be certain tax consequences which arise as a result of the execution and performance of this Agreement and, by executing this Agreement, each Party confirms that no other Party to this Agreement or any counsel has made any representations regarding such consequences.

Q.Severance.  If a provision of this Agreement is held to be illegal or invalid, such provision shall be (a) rewritten by the Court to be legal and valid so long as the rewritten provision remains consistent with the intent of the Parties expressed herein or (b) deemed to be severed and deleted.  Neither such revision nor such severance and deletion shall affect the validity of the remaining provisions.

R.Counterparts.  This Agreement may be executed in counterparts and, if so executed, each counterpart shall have the full force and effect of an original. Further, a telecopied signature page by any signatory shall constitute an original for all purposes.

S.Governing Law.  This Agreement shall be construed and enforced according to the laws of the State of California.

IN WITNESS WHEREOF, the Parties have entered into this Agreement made and effective as of the date first hereinabove written.

	Ethos Environmental, Inc.
Dated: October 16, 2008	By:
		Name: Thomas Maher
		Title: Chief Financial Officer

	GreenBridge Capital Partners, IV, LLC
Dated: October 16, 2008	By:	/s/
		Name: Corey P. Schlossmann
		Title: Managing Member

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EX-99.2

ASSIGNMENT OF PROMISSORY NOTE

This Promissory Note Assignment Agreement (“Agreement”) made as of September ____, 2008, is by and among Enrique de Vilmorin (hereinafter referred to as “Assignor”) and Ethos Environmental, Inc. a Nevada corporation (hereinafter referred to as the “Assignee”).

RECITALS

Whereas, on or about August 2, 2008, Assignor, as the Borrower, executed and delivered a Promissory Note in the principal amount of $500,000 (the “Note’) in favor of a third-party, the Note became due and payable, in full, on September 2, 2008.

Whereas, Assignor now desires to assign all its right, title, and interest in the Note to Assignee, and Assignee shall accept the assignment of the Note in exchange for Assignor’s return to Assignee of 13,600,000 shares of common stock of Assignee owned by Assignor.

AGREEMENT

1.           The Assignor represents, covenants, and warrants that there is now due and owing upon said Note, without offset or defense of any kind, the principal sum of $500,000 which became due and payable at September 2, 2008.

2.           The Assignor does hereby irrevocably transfer and assign, to Assignee of the Assignor’s right, title, and interest in and under the Note and Assignee does hereby irrevocably accept such assignment.

3.           Assignee further agrees that concurrently with the execution hereof, as consideration for Assignee accepting the assignment of the Note, that Assignor shall return to Assignee 13,600,000 shares of the Common Stock of Assignee for cancellation and return to the treasury of Assignee.

IN WITNESS WHEREOF, the parties have executed this Assignment on the day and year first above stated.

ASSIGNOR	ASSIGNEE
ENRIQUE DE VILMORIN	ETHOS ENVIRONMENTAL, INC.
Enrique de Vilmorin	By: Corey Schlossmann

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EX-99.3

SECURED PROMISSORY NOTE

PRINCIPAL AMOUNT:	$500,000.00
INTEREST RATE:	10.00%
BORROWER:	ETHOS ENVIRONMENTAL, INC.
LENDER:	NEWPORT INVESTMENT GROUP LTD.
DUE DATE:	ON OR BEFORE OCTOBER 1, 2009
PAYMENT:	$50,000 WITHIN 30 DAYS FROM THE DATE OF EXECUTION HEREOF AND THE BALANCE DUE PLUS ANY ACCRUED INTEREST TO BE PAID IN FULL ON OR BEFORE THE DUE DATE

THIS NOTE IS ISSUED IN CONNECTION WITH, AND SHALL SUPERSEDE AND REPLACE IN ITS ENTIRETY, THAT CERTAIN PROMISSORY NOTE ASSUMED BY ETHOS ENVIRONMENTAL, INC. ISSUED IN FAVOR OF NEWPORT INVESTMENT GROUP LTD. (THE “ASSUMED NOTE”) AND THIS NOTE SHALL RENDER NULL AND VOID THAT CERTAIN SECURITY AGREEMENT ISSUED IN CONNECTION WITH THE ASSUMED NOTE.

1.Principal Repayment.  For value received, Borrower hereby promises to pay to Lender the principal amount of $50,000 with 10% simple interest thereon.

2.Payment Terms. Borrower shall pay the principal as follows:

  (a) Initial Payment. Borrower shall pay Lender an initial payment of $50,000 within 30 days from the date of execution hereof; and,

  (b) Balloon Payment. The Borrower shall repay the Principal amount plus the accrued interest, less the initial payment, on or before October 1, 2009.

3.Default. Borrower will be in default if any of the following occur:

(a)           Borrower fails to make the Initial Payment or Monthly Payments when due;

(b)           Borrower breaks any promise Borrower has made to Lender in this Note or Borrower fails to perform promptly at the time and strictly in the manner provided in this Note;

(c)           Any representation or statement made or furnished to Lender by Borrower or on Borrower's behalf in connection with this Note is false or misleading in any material respect; or,

(d)           A receiver is appointed for any part of Borrower's property, Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any Bankruptcy or insolvency laws seeking the liquidation or reorganization of Borrower and such proceeding is not dismissed within 60 days after such filing.

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4.           Borrower’s Right to Prepay.  Borrower may pay without penalty, all or a portion of the amount owed earlier that it is due. Any prepayment shall be first applied against any accrued and unpaid interest and then to reduce the amount of principal due under this Note.

5.           Waiver of Demand, Presentment, etc. The Borrower hereby expressly waives demand and presentment for payment, notice of nonpayment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, bringing of suit and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereunder, regardless of and without any notice, diligence, act or omission as or with respect to the collection of any amount called for hereunder.

6.           Payment.  Except as otherwise provided for herein, all payments with respect to this Note shall be made in lawful currency of the United States of America by check or wire transfer of immediately available funds, at the option of the Lender, at the principal office of the Lender or such other place or places or designated accounts as may be reasonably specified by the Lender of this Note in a written notice to the Borrower at least one (1) business day prior to payment.

7.           Assignment.  The rights and obligations of the Borrower and the Lender of this Note shall be binding upon, and inure to the benefit of, the permitted successors, assigns, heirs, administrators and transferees of the parties hereto.

8.           Waiver and Amendment.  Any provision of this Note, including, without limitation, the due date hereof, and the observance of any term hereof, may be amended, waived or modified (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Borrower and the Lender

9.           Notices. Any notice, request or other communication required or permitted hereunder shall be in writing and shall be deemed to have been duly given if personally delivered or mailed by registered or certified mail, postage prepaid, or delivered by facsimile transmission, to the Borrower at the address or facsimile number set forth herein or to the Lender at its address or facsimile number set forth in the records of the Borrower.  Any party hereto may by notice so given change its address for future notice hereunder.  Notice shall conclusively be deemed to have been given when personally delivered or when deposited in the mail in the manner set forth above and shall be deemed to have been received when delivered or, if notice is given by facsimile transmission, when delivered with confirmation of receipt.

10.         Governing Law; Jurisdiction; Waiver of Jury Trial.

(a)THIS NOTE SHALL BE ENFORCED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.

(b)THE BORROWER HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE OF CALIFORNIA OR UNITED STATES FEDERAL COURTS LOCATED IN SAN DIEGO, CALIFORNIA WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS NOTE. THE BORROWER IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. THE BORROWER FURTHER AGREES THAT SERVICE OF PROCESS UPON IT MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER IN ANY SUCH SUIT OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT THE LENDER’S RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.  THE BORROWER AGREES THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL MANNER.

(c)THE BORROWER HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE.

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11.           Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provisions shall be excluded from this Note, and the balance of this Note shall be interpreted as if such provisions were so excluded and shall be enforceable in accordance with its terms.

12.           Headings.  Section headings in this Note are for convenience only, and shall not be used in the construction of this Note.

13.           Attorneys Fees.  Borrower agrees that if any legal action is necessary to enforce or collect this Note, the prevailing party shall be entitled to reasonable attorneys’ fees in addition to any other relief to which that party may be entitled.  This provision shall be applicable to the entire Note.

14.           Entire Agreement.  This Note represents the entire outstanding obligation by Borrower to  Lender in relation to the repayment of such amount due hereunder and supersedes all prior notes, agreements and understandings between Borrower and Lender with respect to the subject matter hereof, written or oral, including, without limitation, the Assumed Note and Security Agreement.

IN WITNESS WHEREOF, the Borrower has caused this Note to be issued as of the date first above written.

Ethos Environmental, Inc.

By:  ______________________________________

        Corey Schlossmann, President

REVIEWED & AGREED:

NEWPORT INVESTMENT GROUP LTD.

_______________________

By:

Its:

Dated:

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EX-99.4

ETHOS ANNOUNCES CORPORATE UPDATE

Statement by Ethos Environmental, Inc. - October 20, 2008

San Diego, California -- Ethos Environmental, Inc. (OTCBB:ETEV) announced today that it has concluded that all of the Company’s previously reported consolidated financial statements filed since, and including, its annual report for the year ended December 31, 2006, should no longer be relied upon.  The Company also has initiated a review of its prior revenue recognition practices and of the accounting treatment of past offers and sales of the Company’s common stock by its former Chief Executive Officer, Enrique de Vilmorin.  Moreover, the Company will review other transactions involving Mr. de Vilmorin.

The current Board of Directors is newly-elected.  It initiated the Company’s internal review after questioning the Company’s past accounting treatment regarding certain accounts receivable and associated revenue.  On September 5, 2008, the Company accepted the resignations of Mr. de Vilmorin, Luis Willars, and Jose Manuel Escobedo from their positions as Company officers and members of the Board of Directors.  In conjunction with his resignation, Mr. de Vilmorin agreed to cancel 13,600,000 shares of the Company’s common stock, constituting his entire stock position in the Company, in exchange for the Company’s assumption of a note payable by Mr. de Vilmorin in the amount of $500,000.  Mr. de Vilmorin is no longer involved with the Company in any capacity.

“We are confident that Ethos Environmental will emerge from this review as a stronger company, with reliable internal controls and financial systems,” said Corey P. Schlossmann, the Company’s interim Chief Executive Officer.

The Company has held discussions with the Company’s current and former independent public accountants.  As a result of the Board’s decision to conduct an inquiry of the Company’s financial operations, all previously issued financial statements dating back to the Company’s annual report for the year ended December 31, 2006, including all related reports of independent registered public accountants, should no longer be relied upon.  Due to the incomplete information in its possession, the Company is not presently able to respond to inquiries or provide further information.

About Ethos Environmental, Inc.

Ethos Environmental, Inc. (OTC BB:ETEV.OB - News), a San Diego-based corporation, is the manufacturer of award-winning fuel reformulating products that help industries meet environmental regulations and relieve skyrocketing fuel costs. By using Ethos FR®, commercial vehicles can increase fuel mileage between 7 percent and 19 percent while reducing harmful emissions by more than 30 percent. For more information about Ethos Environmental, Inc., visit www.ethosfr.com

Contact:

     Yasmine Rangel

     Ethos Environmental, Inc.

     619-575-6800

     yrangel@ethosfr.com

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