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 AND EXCHANGE ACT OF 1934
Date
of
Report (Date of Earliest Event Reported): May 16, 2007 (May 11,
2007)
CHINA
SECURITY & SURVEILLANCE
TECHNOLOGY,
INC.
| |
|
(Exact
name of registrant as specified in
its charter)
|
|
Delaware
|
000-50917
|
98-0509431
|
|
(State
of Incorporation)
|
(Commission
File No.)
|
(IRS
Employer ID No.)
|
|
13/F,
Shenzhen Special Zone Press Tower, Shennan Road
Futian
District, Shenzhen, China, 100020
|
|
(Address
of Principal Executive
Offices)
|
(86)
755-83765666
Registrant’s
Telephone Number, Including Area Code:
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):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01. Entry into a Material
Definitive Agreement
On
May
11, 2007, China Security & Surveillance Technology, Inc. (the “Company”)
entered into an Equity Transfer Agreement (the “Equity
Transfer Agreement”)
with
China Safetech Holdings Limited, a British Virgin Islands Corporation and
a
wholly-owned subsidiary of the Company (“Safetech”),
and
Yi Li, the sole owner of Link Billion Investment Limited, a Hong Kong
Corporation (“Link
Billion”)
pursuant to which Safetech purchased 100% ownership of Link Billion from
Mr. Li.
Link Billion is a holding company that owns all the outstanding equity of
HiEasy
Electronic Technology Development Co., Ltd. (“HiEasy”),
a
corporation incorporated in the People’s Republic of China. HighEasy is based in
Wuhan, China and will provide the Company with advanced compression technology
to enhance the Company’s product offerings and user functionality by
facilitating video and audio transmissions over telecommunications
infrastructure networks. Additionally, the addition of HiEasy is expected
to
provide increased efficiency related to the Company’s current DVR system as data
will be compressed more effectively and seamlessly across the Company’s entire
product suite.
The
Equity Transfer Agreement also contains certain “make good” provisions. Under
the Equity Transfer Agreement, Mr. Li pledged to the Company a total of RMB
25
million (approximately $3.3 million) worth of the Company’s shares of common
stock that he will receive as partial consideration for the acquisition to
secure his make good obligation under the Equity Transfer Agreement. The
Equity
Transfer Agreement established minimum net income thresholds in the range
of RMB
6 million (approximately $0.8 million), RMB 8 million (approximately $1.0
million) and RMB 10 million (approximately $1.3 million) for the fiscal year
of
2007 and RMB 11 million (approximately $1.4 million), RMB 13 million
(approximately $1.7 million) and RMB 15 million (approximately $2.0 million)
for
the fiscal year of 2008. If actual audited net income for the 2007 fiscal
year
is greater than RMB 6 million, but less than RMB 8 million, then the Company
will return RMB 5 million (approximately $0.7 million) worth of the pledged
stock. If actual audited net income for the 2007 fiscal year is greater than
RMB
8 million, but less than RMB 10 million, then the Company will return RMB
7
million (approximately $0.9 million) worth of the pledged stock. If actual
audited net income for the 2007 fiscal year is greater than RMB 10 million,
then
the Company will return RMB 10 million worth of pledged stock. For fiscal
year
2008, if the actual audited net income is greater than RMB 11 million, but
less
than RMB 13 million, then the Company will return RMB 7.5 million (approximately
$1.0 million) worth of pledged stock. If actual audited net income for the
2008
fiscal year is greater than RMB 13 million, but less than RMB 15 million,
then
the Company will return RMB 10 million worth of pledged stock. Finally, if
actual audited net income for the 2008 fiscal year is greater than RMB 15
million, then the Company will return RMB 15 million worth of the pledged
stock.
On
May
11, 2007, the Company and Safetech consummated the acquisition of the 100%
ownership of Link Billion which owns 100% of HiEasy, pursuant to the terms
set
forth in the Equity Transfer Agreement as described above. The information
set
forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein
by
reference in its entirety.
Item
3.02. Unregistered Sales of Equity Securities
The
information pertaining to the Company’s shares of common stock in Item 1.01 is
incorporated herein by reference in its entirety. The shares of the Company’s
common stock issuable to Mr. Li under the Equity Transfer Agreement have
not
been registered under the Securities Act of 1933, as Amended and may not
be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements. This current report on Form 8-K
does
not constitute an offer to sell, or a solicitation of an offer to buy, any
security and shall not constitution an offer, solicitation or sale in any
jurisdiction in which such offering would be unlawful.
ITEM
9.01 FINANCIAL
STATEMENTS AND EXHIBITS
| (a) |
Financial
Statements of Businesses
Acquired.
|
The
financial information that is required pursuant to this Item will be filed
by
amendment not later than 71 calendar days after the date that this initial
report on Form 8-K is required to be filed.
| (b) |
Pro-forma
Financial Report.
|
The
financial information that is required pursuant to this Item will be filed
by
amendment not later than 71 calendar days after the date that this initial
report on Form 8-K is required to be filed.
| Exhibit
10.1 |
Equity
Transfer Agreement, dated May 11, 2007, by and among the registrant,
China
Safetech Holding Limited and Yi Li (English
Translation).
|
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.
China
Security & Surveillance Technology, Inc.
Date:
May
16, 2007
/s/
Tu
Guo Shen
Chief
Executive Officer