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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
Date of Report (date of earliest event reported): September 30, 1998
U.S. DIGITAL COMMUNICATIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
0-21225 88-0101953
(Commission File Number) (I.R.S. Employer Identification No.)
2 Wisconsin Circle, Chevy Chase, Maryland 20815
(Address of Principal Executive Offices, Including Zip Code)
(301) 961-1540
(Registrant's Telephone Number, Including Area Code)
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ITEM 4. CHANGES IN THE REGISTRANT'S CERTIFYING ACCOUNTANT.
On September 30, 1998, the Company's auditors, Arthur Andersen LLP
("Andersen"), resigned as the Company's independent accountants. The change in
accountant is a result of Andersen's resignation and was not recommended or
approved by the Board of Directors, nor was such approval required in order to
give effect to the resignation. The Company has not yet appointed a new
independent accountant.
Andersen had issued an unqualified report, dated September 1, 1998, on the
consolidated financial statements of the Company and its subsidiary as of and
for the year ended December 31, 1997. That report, however, was not released by
the Company and on September 30, 1998, Andersen withdrew the report. Andersen's
resignation and withdrawal was not related to the financial statements.
Further, there were no disagreements between the Company and Andersen on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure or reportable events during such periods or through
the interim period ended September 30, 1998 (date of resignation).
Andersen has advised the Company that at the time of its resignation, it
was preparing to issue a management letter with comments and suggestions for
consideration related to the Company's internal controls. This letter was to
contain a reference to material weaknesses in the Company's internal controls
over financial reporting for the year ended December 31, 1997. However,
Andersen had expanded the scope of its audit to take account of the weaknesses
in internal control so as to be able to issue an unqualified report and its
resignation and withdrawal of the report were unrelated to the Company's
financial reporting for the year ended December 31, 1997. Management of the
Company believes that it has begun to address the issues during 1998 with the
employment of qualified personnel in key financial reporting positions.
On September 17, 1998, the Company became aware that persons affiliated
with the Placement Agent used by the Company during its Series B and C stock
offerings in 1998 are currently under Federal indictment concerning matters
unrelated to the Placement Agent's relationship with the Company.
Arthur Andersen has reviewed this report and has provided the Company the
letter attached hereto as Exhibit 16.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
EXHIBIT NO. DESCRIPTION
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16 Letter of Arthur Andersen LLP dated October 7, 1998.
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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.
U.S. DIGITAL COMMUNICATIONS, INC.
Date: October 7, 1998
By: /s/ Robert J. Wussler
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Name: Robert J. Wussler
Title: Chairman
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EXHIBIT 16
[LETTERHEAD OF ARTHUR ANDERSEN]
October 7, 1998
Securities and Exchange Commission
450 Fifth Street, NW
Washington, D.C. 20549
Ladies and Gentlemen:
We have read Item 4 in the Form 8-K dated October 7, 1998 of U.S. Digital
Communications, Inc. filed with the Securities and Exchange Commission and are
in agreement with the statements contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
