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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
(the "EXCHANGE ACT")
Date of Report (date of earliest event reported): October 13, 1999
Medical Device Alliance Inc.
(the "COMPANY")
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
0-24979 88-0345058
(Commission File Number) (IRS Employer Identification No.)
(Address of Principal Executive Offices, Including Zip Code)
5851 West Charleston, Las Vegas, Nevada 89146
(702) 870-8663
(Registrant's Telephone Number, Including Area Code)
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 4. CHANGES IN COMPANY'S CERTIFYING ACCOUNTANT
As previously reported on Form 8-K, the District Court of Clark
County, Nevada (the "COURT") appointed George C. Swarts as receiver (the
"RECEIVER") over all of the day-to-day administration and management of the
Company and its assets. In connection with its duties as Receiver, and after
obtaining approval of the Court, on October 13, 1999 the Receiver terminated
its engagement with the former accountant to the Company, Farber & Hass, LLP.
The Company is currently interviewing new outside auditors, and expects to
retain a new outside auditor in the near future. As previously reported on
Forms 12b-25 and 8-K, due to the Company's failure to pay the former
auditors, as well as ongoing complications related to the Receivership and
the on-going diligence investigation being conducted by the Receiver, the
Company has not been able to complete the preparation of its financial
statements for the year ended December 31, 1998, and for the interim periods
ended March 31, and June 30, 1999, or to complete the audit of its year end
1998 financial statements.
The former independent auditor's report dated August 7, 1998 (the
"FORMER ACCOUNTANTS' REPORT") regarding the Company's consolidated balance
sheets as of December 31, 1997 and 1996 and the related consolidated
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statements of operations, stockholders' equity and cash flows for the years
then ended (the "PRIOR FINANCIALS"), contained a "going concern"
qualification. According to the Former Accountants' Report and the footnotes
to the Prior Financials, the qualification was primarily due to: recurring
losses from the Company's inception, the Company's expectation that such
losses would continue unless and until its products successfully achieve
commercial viability, and the fact that a significant portion of its
contributed capital was advanced to an affiliated entity (in which the
Company's Chairman of the Board and certain other stockholders had a
controlling interest). The alleged advances were, in turn, loaned to Inamed
Corporation (a corporation in which the Company's Chairman of the Board was
the former Chairman and Chief Executive Officer). The repayment of the
advances was primarily with long term-assets, including an assignment of real
property by another affiliated entity, McMark Limited Partnership (an entity
controlled by the Company's Chairman of the Board), and shares of restricted
Inamed common stock, causing a liquidity problem at the Company. Prior
management stated in the footnotes to the Prior Financials that it had
implemented a cost reduction plan to reduce expenses, and that it believed
that it had the means through existing capital, forecasted sales, the
availability of other resources and by implementing cash-conserving measures
to fund its operations into the foreseeable future and to continue to conduct
business on a going concern basis. However, former management stated that
there could be no assurance that it would, among other things, be able to
successfully consummate and integrate any acquisition of businesses, complete
clinical trials, obtain appropriate regulatory clearance to market its
products (or that such clearance would be obtained on a timely basis), scale
up its manufacturing process or obtain capital when needed and on favorable
terms in order to successfully commercialize its products. The Former
Accountants' Report indicated that the Prior Financials were prepared
assuming the Company would continue as a going concern, and did not include
any adjustments to the recorded amounts of assets or to the recorded amounts
or classification of liabilities which would be required if the Company were
unable to realize its assets and satisfy its liabilities and obligations in
the normal course of business. There were not any disagreements or
"reportable events" with such former accountant. The Company has now paid the
former accountants in full, and is in the process of engaging new auditors,
however, until it can complete the preparation and audit of its financial
statements, the Company will continue to be unable to file its Form 10-KSB
and Form 10-QSBs for such respective periods, and will therefore remain in
non-compliance with its reporting obligations under the Exchange Act. The
Company intends to work diligently with its new auditors to finalize its
financial statements and complete the year end audit as soon as reasonably
practicable, however, given its current financial and other constraints,
combined with the inability to predict the results of the Receiver's on-going
diligence investigation, the Company is unable at this time to determine with
any degree of certainty when it expects to be in full compliance with its
reporting obligations under the Exchange Act.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
There is attached hereto the following exhibits:
EXHIBIT NO. DESCRIPTION OF EXHIBITS.
16.1 Accountants' Letter.
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.
MEDICAL DEVICE ALLIANCE INC.
By: /s/ George C. Swarts
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George C. Swarts, Receiver
Dated: October 20, 1999
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EXHIBIT 16.1
October 20, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We have read the Form 8-K dated October 20, 1999 regarding the change in
Registrant's Certifying Accountant and concur with the representations made
herein.
/s/ Farber and Hass LLP
Oxnard, California
