-----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, L3XbhsYAGONGb/v02jggxbv/6YElTC5tGyauzfOwyNA2QmEs9/bR0dIRPFpAhT10 6GY9MdukvnQwcPm2ptKvjg== 0001144204-08-063510.txt : 20081113 0001144204-08-063510.hdr.sgml : 20081113 20081113172046 ACCESSION NUMBER: 0001144204-08-063510 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20081109 ITEM INFORMATION: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review FILED AS OF DATE: 20081113 DATE AS OF CHANGE: 20081113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MSGI SECURITY SOLUTIONS, INC CENTRAL INDEX KEY: 0000014280 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] 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: 081185961 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 v132028_8k.htm Unassociated Document

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: November 9, 2008
 
(Exact name of Registrant as specified in charter)
 
Nevada
0-16730
88-0085608
(State or other jurisdiction of incorporation)
(Commission File No.)
(I.R.S. Employer Identification No.)
 
575 Madison Avenue
New York, New York 10022
(Address of Principal Executive Offices)
 
917-339-7134
(Registrant’s telephone number, including area code)
 

Item 4.02. Non-Reliance on Previously Issued Financial Statements
 
On November 9, 2008, officers of MSGI Security Solutions, Inc. (the Company) determined that the financial statements issued on Form 10-QSB for the period ended March 31, 2008 could no longer be relied upon because of an error in such financial statements as addressed in the Financial Account Standards Board (FASB) Statement of Financial Accounting Standards No. 154.
 
During the three month period ended March 31, 2008, the Company recognized and reported approximately $4.0 million in revenues and corresponding accounts receivable, as well as related costs of products sold of approximately $3.3 million. These revenues and associated costs of products sold were derived solely from the Company’s relationships with Hyundai Syscomm Corp, Apro Media Corp. and Hirsch Capital Corp. Since that time, the Company has experienced difficulties in collection of the corresponding accounts receivable. The Company has subsequently determined that these shipments and related billings did not meet all the criteria for GAAP revenue recognition at March 31, 2008 due to collectibility not being reasonably assured among other factors. Therefore, this represented an error as, in retrospect, these revenues should not have been recognized in the quarter ended March 31, 2008, thus requiring the reversal of the revenue as well as the related accounts receivable. The Company will recognize these revenues when and if the payments are received and collection is thus assured.

The Company has also determined that it is appropriate to recognize as an asset the related costs of products sold, net of an estimated reserve for potential loss, until such time as the revenue is recognized, product is returned or these product costs are considered unrealizable and are written off. Costs related to these transactions have been capitalized in the amount of $3.3 million for the three months ended March 31, 2008. The Company has reduced these capitalized costs with a reserve for potential loss in the amount of $0.8 million for the three months ended March 31, 2008 to estimate the potential cost that may be unrecoverable. This reserve was recorded in cost of goods sold.

The officers of the Company, as well as the audit committee of the Company’s Board of Directors, have discussed this matter with the Company’s independent accountants.

Item 9.01. Financial Statements and Exhibits

N/A
 

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: November 13, 2008 By:   /s/ Richard J. Mitchell, III
 
Name:  Richard J. Mitchell, III
 
Title:    Chief Accounting Officer
 
 
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