Organization and Nature of Business

12 Months Ended

Dec. 31, 2012

Organization and Nature of Business

Organization and Nature of Business

1. Organization and Nature of Business

Timios National Corporation (together with any subsidiaries shall be referred to as the “Holding Company,” “Company,” “we,” “us” and “our”) is a consolidator of companies, whose current operating companies provide title, escrow, appraisal and asset management real estate services. We are focused on creating long-term value by taking a controlling interest in and developing our subsidiary companies through superior operations and management. We intend to operate businesses that provide real estate services, growing organically and by acquisitions. The Company is targeting emerging companies that are generating revenues but face challenges in scaling their businesses to capitalize on growth opportunities.

The Company was incorporated in Delaware in August 1997 under the name “Celerity Systems Inc.” In December 2005, the Company amended its Certificate of Incorporation to change its name to “Homeland Security Capital Corporation.” The Company’s primary business plan was to acquire and operate companies serving the homeland security business sector. In February 2006, the Company acquired 93% of Nexus Technologies Group, Inc. (Nexus) and its subsidiaries and, in March 2008, the Company acquired 100% of Safety & Ecology Holding, Inc. (Safety) and its subsidiaries.

On July 6, 2011, the Company, through a newly formed subsidiary, Fiducia Holdings, LLC or Holdings, whose entire membership interests were exchanged for preferred and common stock in Fiducia Holdings Corporation, or FHC, in December 2011; (see Note 15- Related Party Transactions), acquired 80% of Fiducia Real Estate Solutions, Inc. or FRES. FRES wholly owns three companies:  (1) Timios, Inc. (Timios), which is engaged in title and escrow services for mortgage origination and refinance, reverse mortgages and deed-in-lieu transactions; (2) Timios Appraisal Management, Inc. (TAM), which is engaged in property appraisal services; and (3) Default Servicing USA, Inc. (DSUSA), which is engaged in real estate-owned liquidation services to institutional real estate owned, or REO, customers.

On August 19, 2011, the Company finalized the sale of the assets of Corporate Security Solutions, Inc. (CSS), a wholly owned subsidiary of Nexus (which changed its name to NTG Management Corporation (NTG) after the sale) and on October 31, 2011, the Company finalized the sale of all of its stock in Safety.  The Company used $14,385,827 of the proceeds from these sales to retire debt and effectively exited the homeland security business sector.

On August 28, 2012, the stockholders of the Company voted to amend our Certificate of Incorporation, which among other things (1) changed our name to Timios National Corporation, (2) changed the amount of our authorized capital stock from 2,000,010,000 to 55,000,000 shares and designated 50,000,000 shares as common stock, par value $0.001, and 5,000,000 shares as preferred stock, par value $0.01, and (3) approved a 1-for-500 reverse split of our then outstanding common stock.

Also on August 28, 2012, the Company entered into an Exchange Agreement with its major shareholder and senior lender, management and minority shareholders. Under the agreement, a specified amount of senior debt, all of the Company’s Series H Convertible Preferred Stock, all of the Company’s common stock warrants and all minority interests were exchanged for newly created shares of Series J Convertible Preferred Stock and Common Stock. (see Note 10 - Exchange Agreement)

The Company’s primary business plan will continue to be the owner of a majority of the outstanding capital stock of its subsidiaries, control each of its subsidiary boards of directors and provide extensive management and advisory services to its subsidiaries. Accordingly, the Company believes it will exercise sufficient control over the operations and financial results of each of its subsidiaries and will consolidate the results of operations, eliminating minority interests when such minority interests have a basis in the consolidated entity.