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 2004
Date of report (date of earliest event reported): August 25, 2006
MAGNITUDE INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-20432 75-2228828
(Commission File Number) (IRS Employer Identification No.)
401 State Route 24, Chester, New Jersey 07930
(Address of principal executive offices) (Zip Code)
(908) 879-2722
(Registrant's telephone number)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation 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))
INFORMATION TO BE INCLUDED IN THE REPORT
Item 1.01 Entry into A Material Definitive Agreement.
Item 3.02 Unregistered Sales of Equity Securities.
Item 5.02 Departure of Director and Principal Officer;
Appointment of Directors and Principal Officers
Item 7.01 Regulation FD Disclosure
Magnitude Information Systems, Inc. (The "Company") today announced the naming
of Steven L. Gray as Chairman of the Board of Directors. Mr. Gray succeeds
Steven D. Rudnik, Founder, who has retired from the Board of Directors in order
to pursue personal and other business endeavors. Mr. Gray has led several
corporations from nascent stage development to maturity, delivering significant
returns to investors. Mr. Gray has served on the Magnitude board of directors
for many years.
The Board of Directors also promoted Matthew J. Scott to the position of
President of the Company. Mr. Scott's duties will include executive leadership
in product development and all facets of operations. Prior to joining Magnitude,
Scott was a principal owner of Spectrum Press in Roseland, New Jersey for many
years. In January, 2004, Scott became an owner and principal officer of Mpower
Digital, another printing company located in Stanhope, New Jersey until August,
2005.
Edward L. Marney continues as Chief Executive Officer and has been appointed by
unanimous vote to Magnitude's Board of Directors. Prior to accepting this
position Mr. Marney has enjoyed a highly successful career in the software
industry, most recently at WebMD Corporation.
As Chief Executive Officer and President of TouchPoint, Mr. Marney led the
development and marketing of proprietary Business Intelligence (BI)
technologies. In 2001 TouchPoint was acquired by WebMD Corporation as a
"strategic asset" in an all-cash transaction. Prior to TouchPoint, Mr. Marney
had successful careers at both Medical Information Technologies, Inc. and
Burroughs Corporation (UNISYS Corporation).
Restructure of Magnitude Operations
Ed Marney also announced today that his management team is restructuring
operations by outsourcing the sales and customer support functions, permitting a
parallel reduction of three full-time employees in its workforce. Mr. Marney
stated that "we have a new strategy to support Magnitude's current software
products." Continuing, Mr. Marney declared that "Through outsourcing support of
the ErgoEnterprise product line, we are reducing operational expense and
allowing the Company to focus on an expanded product offering. We are focused on
delivering technologies that bring large revenue opportunities with significant
profit margins in the near future."
Magnitude Investment
On August 25, 2006, Magnitude entered into Stock Purchase Agreements with three
accredited investors for the sale of 30,000,000 Units. Each Unit consists of (a)
one share of common stock and (b) one-half of a common stock purchase warrant,
exercisable during its three year term at the exercise price of $.05 per common
share. The securities to be issued pursuant to the Stock Purchase Agreements are
to be issued pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act") provided by Section 4(2) of
the 1933 Act.
Pursuant to the terms of the Stock Purchase Agreements, the purchase price of
each Unit is $.02 and the Company has received aggregate subscription funds for
the 30,000,000 Units of $600,000. Under the terms of the Stock Purchase
Agreements, the Company is required to file a registration statement,
registering the common shares and the common shares underlying the warrants
under the 1933 Act within 90 days, or no later than November 23, 2006 and the
registration must be declared effective within 90 days of filing or the Company
is subject to certain penalties. The Company is required to maintain the
effectiveness of the registration statement until allof the subject shares have
been sold or are eligible to be transferred without restriction pursuant to Rule
144(k).
The foregoing information was disclosed in a press release issued today, a copy
of which is attached hereto as an exhibit.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits:
10.1 Form of Stock Purchase Agreement
99.1 Press Release, dated August 30, 2006
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, thereunto duly authorized.
MAGNITUDE INFORMATION SYSTEMS, INC.
Dated: August 30, 2006 By: /s/ Joerg H. Klaube
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Joerg H. Klaube
Chief Financial Officer