UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FEBRUARY 4, 2007
(Date of Report)
MIDNIGHT HOLDINGS GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-22142 55-0681106
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
22600 HALL ROAD
SUITE 205
CLINTON TOWNSHIP, MI 48036
(Address of principal executive offices)
(586) 468-8741
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02(a). NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A
RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
On February 4, 2007, the Board of Directors of the Registrant (the "Board") and
the Registrant's management concluded that previously reported audited financial
statements for the year ended December 31, 2005 (the "2005 Financial
Statements") should no longer be relied upon and would be restated.
Specifically, the Registrant determined that the derivative liabilities and the
amount payable as Default Payments (as defined below) to certain holders of its
outstanding callable convertible promissory notes (the "Note Holders"), which
were originally issued on April 27, 2004 (the "April 2004 Note") and June 11,
2004 (the "June 2004 Note" and together with the April 2004 Note, the "Notes"),
were incorrectly calculated.
In the 2005 Financial Statements filed with the Registrant's Annual Report on
Form 10-KSB for the year ended December 31, 2005, the Registrant disclosed that
the Notes were in default as of December 29, 2004, which entitled the Note
Holder to demand repayment of the then outstanding principal amount under the
Notes (the "Principal Amount") in an amount equal to the greater of (a) 130% of
(i) the Principal Amount, (ii) accrued but unpaid interest, and/or (iii) any
default interest or registration statement penalties accrued thereunder (the
amounts referred to in (i), (ii) and (iii) together with the Principal Amount,
the "Default Sum"), and (b) number of shares of the Registrant's common stock,
par value $0.00005 (the "Common Stock") per share, into which the default sum
was convertible multiplied by the highest market price of the Common Stock
commencing as of the date of the event of default (the "Default Payment"). An
event of default occurred on August 25, 2004 as to the April 2004 Note and on
October 9, 2004 as to the June 2004 Note, both of which occurred prior to the
December 29, 2004 event of default that was disclosed in the 2005 Financial
Statements filed with the Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 2005. As a result, the aggregate amount payable to the Note
Holders as Default Payments under the Notes recognized in the 2005 Financial
Statements filed with the Registrant's Annual Report on Form 10-KSB for the year
ended December 31, 2005 was overstated by $208,954 and should have been recorded
as $1,041,046 and the aggregate derivative liabilites was understated by
$3,858,710 and should have been recorded as $12,039,667.
The effect of the non-cash restatements related to the derivative liabilities
and amount payable to the Note Holders as Default Payments under the Notes as of
December 31, 2005 will be to increase the Registrant's net loss for the year
ended December 31, 2005 by $3,649,756 to $13,018,718. In addition, the effect of
the restatements related to the basic and diluted net loss per share
attributable to the holders of Common Stock for the year ended December 31, 2005
will remain at $.03. The effect of the restatements on our balance sheet as of
December 31, 2005 will be a decrease to stockholders' deficit from $10,455,150
to $14,104,906.
After discussion with the Board, Management and Malone & Bailey, the
Registrant's independent registered public accounting firm, the company
concluded that, due to the errors, the previously issued consolidated financial
statements for the year ended December 31, 2006, which were in the Company's
Annual Report on Form 10-KSB on November 17, 2006 should not be relied upon.
The Registrant intends to restate the 2005 Financial Statements when they file
their Annual Report on Form 10-KSB for the year ended December 31, 2006.
ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) None.
(b) None.
(c) Exhibits.
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SIGNATURE
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.
Dated: March 23, 2007
Midnight Holdings Group, Inc.
By: /S/ NICHOLAS COCCO
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Name: Nicholas Cocco
Title: President and Chief Executive Officer
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