-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PXtvTj/CaTRVp5KuXeT1Xik3xYG8NTFvjwQXDIgd72SSHbM95xC8F9Q2GsdRBc5R pHrBsjM9fsYlOCVdNi69uw== 0000014280-05-000136.txt : 20050907 0000014280-05-000136.hdr.sgml : 20050907 20050907171104 ACCESSION NUMBER: 0000014280-05-000136 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050831 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MSGI SECURITY SOLUTIONS, INC CENTRAL INDEX KEY: 0000014280 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 880085608 STATE OF INCORPORATION: NV FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01768 FILM NUMBER: 051073425 BUSINESS ADDRESS: STREET 1: 575 MADISON AVENUE STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 917-339-7134 MAIL ADDRESS: STREET 1: 575 MADISON AVENUE STREET 2: 10TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: MEDIA SERVICES GROUP INC DATE OF NAME CHANGE: 20041202 FORMER COMPANY: FORMER CONFORMED NAME: MEDIA SERVICE GROUP INC DATE OF NAME CHANGE: 20040408 FORMER COMPANY: FORMER CONFORMED NAME: MKTG SERVICES INC DATE OF NAME CHANGE: 20020403 8-K 1 form8ktxt.txt FORM 8K - INNALOGIC 76% OWNERSHIP 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: August 31, 2005 MSGI SECURITY SOLUTIONS , INC. (Exact name of Registrant as specified in charter) Nevada 0-16730 88-0085608 - -------------------------------------------------------------------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File No.) Identification No.) incorporation) 575 Madison Avenue New York, New York 10022 ------------------------ (Address of Principal Executive Offices) 917-339-7134 ------------- (Registrant's telephone number, including area code) Item 1.01 Entry into a Material Definitive Agreement Item 2.01 Completion of Acquisition of Assets As previously reported, MSGI Security Solutions, Inc. ("MSGI" or the "Company") purchased 51% of Innalogic LLC ("Innalogic") in August 2004. Pursuant to the transaction, MSGI was entitled to an additional 25% interest in Innalogic if certain financial targets were not met by August 31, 2005. Therefore on August 31, 2005 MSGI acquired an additional percentage of Innalogic thereby providing MSGI with a 76% stake in Innalogic. No additional consideration was required. The foregoing summary is qualified in its entirety by the Form of Agreement to Issue Additional Company Interests incorporated herein as Exhibit 4.1 Item 9.01 Financial Statements and Exhibits (a) Financial statements of business acquired * (b) Pro forma financial information * (c) The following documents are filed herewith as exhibits to this Form 8-K: Exhibit No. 4.1 Form of Agreement to Issue Additional Company Interests 99.1 Press Release issued by the Registrant dated August 30, 2005. 2 Financial Statements of Business Acquired and Unaudited Pro Forma Financial Information * Innalogic LLC has been reported as a subsidiary of MSGI Security Solutions, Inc (the "Company" or the "Registrant") since original acquisition by the Registrant and inception of operations in August 2004. The historical consolidated financial statements of the Registrant report the results of operations and balance sheet of Innalogic LLC as if a wholly-owned subsidiary, with no reported minority interests, as a result of historical operational losses. As such, there is no effect of this reported transaction to the historical financial statements of the Registrant. The Company hereby incorporates by reference to Company's reports on Form 10-Q for the quarters ended September 30, 2004, December 31, 2004 and March 31, 2005. 3 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. MSGI SECURITY SOLUTIONS, INC. Date: September 7, 2005 By: /s/ Richard J. Mitchell III ---------------------------- Name: Richard J. Mitchell III, Chief Accounting Officer EXHIBIT INDEX Exhibit No. Description of Exhibit 4.1 Form of Agreement to Issue Additional Company Interests 99.1 Press Release issued by the Registrant dated August 30, 2005. EX-4 2 exhibit4txt.txt AGREEMENT TO ISSUE ADDITIONAL COMPANY INTERESTS AGREEMENT TO ISSUE ADDITIONAL COMPANY INTERESTS AGREEMENT TO ISSUE ADDITIONAL COMPANY INTERESTS, dated as of August 31, 2005, between Innalogic, LLC, a Delaware limited liability company (the "Company"), MSGI Security Solutions, Inc., f/k/a Media Services Group, Inc. ("MSGI"), Bryan M. Parola ("Parola"), Mark N. Clemente ("Clemente"), Vincent T. Jones ("Jones"), Pierre Davidoff ("Davidoff"), Wenkai Michael Chang ("Chang"), and Dean Capawana ("Capawana"; Parola, Clemente, Jones, Davidoff Chang and Capawana, collectively, the "Founding Members"). Recitals A. MSGI and the Founding Members (together, the "Members") are parties to the Amended and Restated Limited Liability Company Agreement, dated as of August 18, 2004 (the "Operating Agreement"). Capitalized terms used herein not otherwise defined herein shall have the respective meanings set forth in the Operating Agreement. B. Prior to the date hereof, the Percentage Interests of (i) each of the Members was adjusted to reflect the complete redemption by the Company of the Company Interests of a member of the Company and (ii) each of the Founding Members was reallocated to reflect the issuance of additional Company Interests to one of the Founding Members, such that immediately prior hereto, the Percentage Interest of MSGI equals 55.33% and the Percentage Interest of each of the Founding Members equals 7.445%. C. Pursuant to Section 10.8 of the Operating Agreement, in the event that by August 31, 2005 the aggregate pre-tax income of the Company does not equal or exceed the Total Target Amount as set forth on Schedule D of the Operating Agreement then, among other things, the Percentage Interest of MSGI shall be increased and the Percentage Interest of the Founding Members in the aggregate shall be reduced (in the ratio of their Percentage Interests) by the amount of such increase. D. The Members have agreed that as of the date hereof, the aggregate pre-tax income of the Company does not equal or exceed the Total Target Amount and that the Percentage Interests of the Members shall be adjusted accordingly. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Issuance of Additional Company Interests. (a) The Company hereby issues to MSGI additional Company Interests constituting a Percentage Interest equal to 20.67% such that immediately following the execution and delivery of this Agreement by all of the Members, (i) the Percentage Interest of MSGI shall equal 76% and (ii) the Percentage Interest of each of the Founding Members shall equal 4%. (b) MSGI hereby acknowledges and agrees that such issuance pursuant hereto shall satisfy the terms and provisions of Section 10.8 of the Operating Agreement and, notwithstanding anything therein or in Schedule D to the Operating Agreement or elsewhere to the contrary, MSGI shall not be entitled to any further Company Interests (or any increase in its Percentage Interest) pursuant thereto. 2. Schedule B to the Operating Agreement. Schedule B to the Operating Agreement is hereby deleted in its entirety and Schedule B attached hereto substituted in lieu thereof. 3. Acknowledgement by MSGI. MSGI hereby acknowledges and agrees that as of the date hereof, none of the Company Interest (including the Company Interest issued pursuant hereto) have been registered under the Securities Act of 1933, as amended, or any state or foreign securities laws, and that it is acquiring the Company Interest for investment solely for its own account and not for distribution, Transfer or sale to others in connection with any distribution or public offering in violation of federal or state securities laws. 4. Miscellaneous. (a) This Agreement, and all matters relating to the validity, construction, performance and enforcement hereof, shall be governed, construed and controlled by and under the laws of the State of Delaware. (b) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by fax signature, which shall have full binding legal effect. (c) This Agreement, together with the Operating Agreement as amended hereby, constitutes and contains the sole and entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior discussions, agreements and understandings of every kind and nature between such parties and/or their respective Affiliates as to such subject matter. IN WITNESS WHEREOF, each of the undersigned, intending to be legally bound hereby, has duly executed this Agreement as of the date first set forth above. INNALOGIC, LLC /s/Bryan Parola By:------------------------- Bryan Parola Chief Executive Officer MSGI SECURITY SOLUTIONS, INC. /s/Jeremy Barbera By:------------------------- Jeremy Barbera, Chief Executive Officer /s/Bryan M. Parola --------------------------- Bryan M. Parola /s/Mark N. Clemente --------------------------- Mark N. Clemente /s/Vincent T. Jones --------------------------- Vincent T. Jones /s/Pierre Davidoff --------------------------- Pierre Davidoff /s/Wenkai Michael Chang --------------------------- Wenkai Michael Chang /s/Dean Capawana --------------------------- Dean Capawana - 3 - SCHEDULE B Members Name and Address Percentage Interest ---------------- ------------------- MSGI Security Solutions, Inc. 76.0% 575 Madison Ave., 10th Fl. New York, NY 10022 Bryan M. Parola 4.0% 92 Horatio Street, #3P New York, NY 10014 Mark N. Clemente 4.0% 170 Midwood Road Glen Rock, NJ 07452 Vincent T. Jones 4.0% 44 Congress St. #2 Harrison, NY 10528 Pierre Davidoff 4.0% 541 Dean Street Apt #1 Brooklyn, NY, 11217 Wenkai Michael Chang 4.0% P.O. Box 164 Armonk, NY 10504 Dean Capawana 4.0% 252 Monroe Avenue Wyckoff, NJ 07481 EX-99.1 3 exhibit99txt.txt PRESS RELEASE MSGI EXPANDS STAKE IN SECURITY SERVICES FIRM Innalogic Subsidiary Now 76% Owned New York, NY, August 30, 2005 - MSGI Security Solutions, Inc. (Nasdaq: MSGI) today announced that it has taken the second in a series of material steps to increase ownership in its subsidiaries by acquiring an additional 25% of Innalogic LLC (www.innalogic.com ); thereby providing MSGI with a 76% stake in the company. Pursuant to a ratchet provision included in the Amended and Restated Limited Liability Company Agreement, dated August 18, 2004 between MSGI and the Innalogic LLC Members, MSGI is entitled to receive an additional 25% stake with no additional consideration effective August 31, 2005. Innalogic now begins its second year of operations with a sales pipeline of projects well in excess of $2 million in pending engagements currently under negotiation, and several new strategic business partnerships. New York based Innalogic, is a wireless software development and network engineering firm that works with clients - such as the U.S. Department of Homeland Security - to custom-design technology system that deliver safety and security solutions over wireless or wired networks. Innalogic has commercialized products now being marketed to public and private sector customers - and is finalizing the development of a proprietary security-related encryption software application. About MSGI MSGI Security Solutions, Inc. (Nasdaq: MSGI) is an international proprietary solutions provider developing a combination of innovative emerging businesses that leverage information and technology. MSGI is principally focused on the homeland security, public safety and law-enforcement services industry. The Company is headquartered in New York City, and has regional offices in Washington DC; and Milan, Italy. MSGI acquires material interests in high-growth technology and software development businesses. These firms are led by successful entrepreneurs and experienced management teams that have developed end-to-end client solutions that meet current and emerging market needs. The Company is currently comprised of three operating companies and a significant unconsolidated investment which collectively deliver a powerful array of strategic synergies for cross-selling and joint product development. MSGI is engaged in an ongoing corporate growth program whose focus is acquisitions, strategic alliances and co-branding relationships in the United States and Europe. More information on MSGI is available on the Company's website at: http://www.msgisecurity.com. The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, spending levels and other factors could cause actual results to differ materially from the Company's expectations. .. -----END PRIVACY-ENHANCED MESSAGE-----