Item 4.01. Changes in Registrant’s
Certifying Accountant
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(a)
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Dismissal of Independent Registered Accounting Firm
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On July 15, 2013 MSGI Technology Solutions, Inc. (the “Company”)
terminated the services of L J Soldinger Associates, LLC (“LJSA”) as the Company’s Independent Certified Public
Accountants. LJSA the firm served as the Company’s Independent Certified Public Accountants for each of the fiscal years
ended June 30, 2009, 2010, and for the first and second quarters of the fiscal year ended June 30, 2011.. The decision to terminate
the services of LJSA was approved by the Audit Committee of the Company’s Board of Directors.
The Company last filed its consolidated financial statements on
Form 10-K for and as of the fiscal year ended June 30, 2010. The company last filed its interim quarterly report on Form 10-Q for
and as of the period ended December 31, 2010. There have been no financial filings by the Company for the quarterly or fiscal year
end periods subsequent to the interim period ended December 31, 2010.
During the last reported fiscal year ended June 30, 2010, and in
the subsequent interim periods through the date of LJSA’s termination, (i) there were no disagreements with LJSA on any matter
of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement(s), if
not resolved to the satisfaction of LJSA, would have caused it to make reference to the subject matter of the disagreement(s) in
connection with its reports. The reports of LJSA on the Company’s consolidated financial statements as of and for the fiscal
year ended June 30, 2010 did not contain an adverse opinion or disclaimer of opinion, or qualified opinion,, audit scope, or accounting
principles, except for an explanatory paragraph indicating substantial doubt about the Company’s ability to continue as a
going concern in the audit report for the fiscal year ended June 30, 2010.
During the Company’s two most recently reported fiscal years
through the date of LJSA’s termination, the Company had the following reportable events within the meaning of Item 304(a)(1)(v)
of Regulation S-K:
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L J Soldinger Associates, LLC had advised the Company of numerous material weaknesses in the internal controls
over financial reporting necessary for the registrant to develop reliable financial statements.
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In the first and second calendar quarters of 2011, as the result of the Company receiving
two comment letters from the Staff of the Securities and Exchange Commission dated March 1, 2011 and July 14, 2011,
L
J Soldinger Associates, LLC
advised us that these comments, if further investigated, more-likely-than-not would have a material
impact on the fairness or reliability of our previously issued audited and unaudited financial statements and
L
J Soldinger Associates, LLC
corresponding audit reports.
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Also, as the result of additional information coming to the Company’s and
L
J Soldinger Associates, LLC
attention (in the form of conversations with the Staff of the Securities and Exchange Commission
and the results of a valuation report the Company obtained from an independent valuation firm valuing certain derivatives related
to convertible debt and equity instruments),
L J Soldinger Associates LLC
concluded and advised
the Company, this information would have a material impact on the fairness, and/or reliability, of previously issued audited and
unaudited Company financial statements and
L J Soldinger Associates LLC
corresponding audit reports.
However, as a result of the Company’s
being delisted and going dormant, the issues were not resolved to
L J Soldinger Associates, LLC
and the Company’s
satisfaction.
The Company provided a copy of the foregoing disclosures and requested
from LJSA a letter addressed to the U.S. Securities and Exchange Commission stating whether it agrees with such statements, made
by the Company in response to Item 304(a) of Regulation S-K and, if not, stating the respects in which it does not agree. The letter
from L J Soldinger Associated, LLC is filed herewith.
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(b)
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Engagement of New Independent Registered Accounting Firm
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On July 25, 2013, the Company, with the approval of the Audit Committee,
engaged MaloneBailey LLP (“MaloneBailey”) as the Company’s new independent registered accounting firm.
During the two most recent fiscal years and through the July 25,
2013, neither the Company, nor anyone on its behalf, consulted MaloneBailey regarding (i) either the application of accounting
principles to a specified transaction, either completed or proposed: or the type of audit opinion that might be rendered on the
Company’s financial statements, and neither a written report nor oral advice was provided to the Company by MaloneBailey
that it concluded was an important factor considered by the Company in reaching a decision as to the accounting , auditing or financial
reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv)
of Regulation S-K and the related instructions) or a “reportable event” as defined in Item 304(a)(1)(v) of Regulation
S-K.
Item 4.02. Non Reliance on Previously
Issued Financial Statements
(b) As disclosed
in section 4.01(a) found above, during the research of and preparation of response to certain comment letters from the Staff of
the U.S. Securities and Exchange Commission
dated March 1, 2011 and July 14, 2011,
conversations
with the Staff of the Securities and Exchange Commission and the results of a valuation report (which the Company obtained from
an independent valuation firm valuing certain derivatives related to convertible debt and equity instruments),
the Company was advised by its independent accountants, L J Soldinger Associates, LLC, that Staff comments surrounding the valuation
of
certain derivatives related to convertible debt and equity instruments
would
more-likely-than-not
result in a material impact to
and a required restatement of prior financial statements. This advice was received from the independent accountant during the period
of July 2011. As such, the Company’s previously issued financial statements for the fiscal year ended June 30, 2010 included
in the Company’s annual report on Form 10-K as well as the financial statements for the three month period ended September
30, 2010 and for the three and six month periods ended December 31, 2010 included in the Company’s interim reports on Form
10-Q should no longer be relied upon.
The Company’s independent accountant
discussed these matters with the Audit Committee and with authorized officers of the Company in July 2011.
As a result of the Company’s
being delisted and going dormant in June 2011, amended filings on Form 10-K and on Form 10-Q for the periods involved were not
filed with the Securities and Exchange Commission. The Company plans to file amended reports on Form 10-K and Form 10-Q for each
of these periods with the Securities and Exchange Commission as soon as practical subsequent to the filing of this current report
on Form 8-K.