Attached files
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| EX-4.2 - MSGI TECHNOLOGY SOLUTIONS, INC | v178775_ex4-2.htm |
| EX-4.3 - MSGI TECHNOLOGY SOLUTIONS, INC | v178775_ex4-3.htm |
| EX-4.1 - MSGI TECHNOLOGY SOLUTIONS, INC | v178775_ex4-1.htm |
| EX-4.4 - MSGI TECHNOLOGY SOLUTIONS, INC | v178775_ex4-4.htm |
| EX-10.1 - MSGI TECHNOLOGY SOLUTIONS, INC | v178775_ex10-1.htm |
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, DC
20549
FORM
8-K
Current
Report Pursuant to
Section
13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report: March 23, 2010
MSGI
SECURITY SOLUTIONS, INC.
(Exact
name of Registrant as specified in charter)
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Nevada
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0-16730
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88-0085608
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(State
or other jurisdiction of
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(Commission
File No.)
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(I.R.S.
Employer
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incorporation)
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Identification
No.)
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One
Market Street
Spear
Tower, 36th
Floor
San Francisco, California
94105
(Address
of Principal Executive Offices)
415-293-8551
(Registrant's
telephone number, including area code)
Item 1.01. Entry into a Material
Definitive Agreement
Item 2.03. Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of
a Registrant.
Item 3.02. Unregistered Sale of
Equity Securities.
On March
23, 2009 MSGI Security Solutions, Inc. (“MSGI” or the “Company”) pursuant to a
Subscription Agreement between the Company and various institutional investors
(the “Investors”) issued secured convertible promissory notes in the aggregate
principal amount of $650,000.00 (the “Notes”) and stock purchase warrants
exercisable over a five year period for up to 6,500,000 shares of common stock
(the “Warrants”) in a private placement. There was no acting placement agent for
this transaction.
The Notes
have a maturity date of March 23, 2011 and will accrue interest at a rate of 10%
per annum, compounded annually. Payments of principal under the Notes are not
due until the maturity date and interest is due on a quarterly basis, however
the Investors can convert the principal amount of the Notes into common stock of
the Company, provided certain conditions are met, and each conversion is subject
to certain volume limitations. The conversion price of the Notes is $0.10 per
share yielding an aggregate total of possible shares to be issued as a result of
conversion of 7,150,000 shares. The exercise price of the Warrants is $0.15 per
share.
The
Company has also entered into a security agreement (the “Security Agreement”)
with the Investors in connection with the closing, which grants security
interests in certain assets of the Company and the Company’s subsidiaries to the
Investors to secure the Company’s obligations under the Notes and
Warrants.
In
addition, the Company entered into an additional investment rights agreement
(the “Additional Investment Right”), which grant each of the Investors the right
to purchase additional principal amounts of secured convertible promissory notes
equal to the principal amounts purchased in this original transaction.
These
rights are in effect for a period of up to 180 days after the date of closing of
this original transaction. The issuance of the Notes and Warrants constituted a
private placement and therefore was exempt from registration in accordance with
Regulation D of the Securities Act of 1933, as amended.
One of
the Investors received a due diligence fee comprised of 5 year warrants
exercisable for 500,000 shares of common stock at an exercise price of $0.01 per
share. Associated closing costs, legal fees and various reimbursable expenses
totaling approximately $81,000.00 were paid from the gross proceeds of the
transaction.
A copy of each of the form of the Note,
the Warrant, the Security Agreement, the Additional Investment Right and the
Subscription Agreement, is filed herewith as Exhibits 4.1, 4.2, 4.3, 4.4 and
10.1, respectively, and each is incorporated herein by reference. The foregoing
description is qualified in its entirety by reference to Exhibits 4.1, 4.2, 4.3,
4.4 and 10.1.
Item
9.01. Financial Statements
and Exhibits
(a)
N/A
(b)
N/A
(c) N/A
(d) 4.1.
Form of Note
4.2.
Form of Warrant
4.3. Form of Security Agreement
4.4. Form of Additional
Investment Right
10.1. Form of Subscription
Agreement
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MSGI SECURITY SOLUTIONS,
INC.
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Date:
March 26, 2010
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By:
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/s/ Richard J. Mitchell III
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Name:
Richard J. Mitchell III,
Chief
Accounting Officer
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