SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A (No. 2)
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) July 7, 2000
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1st MIRACLE GROUP, INC., n/k/a MIRACLE ENTERTAINMENT INC.
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(Exact name of Registrant as specified in its Charter)
Nevada
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(State of other jurisdiction of incorporation)
0-27007 88-047481
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Commission File No. I.R.S. Employer Identification
8730 Sunset Boulevard, Penthouse East
West Hollywood, California 90069
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Address of principal executive offices Zip Code
(310) 360-7490
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Registrant's telephone number,
including area code
<PAGE>
ITEM 4. CHANGES IN REGISTRANT'S CERTIFIED ACCOUNTANT
1st Miracle Group, Inc. (a New York corporation), n/k/a Miracle
Entertainment, Inc. which acquired K-9 Protection Inc. (a Nevada corporation
n/k/a Miracle Entertainment, Inc.) (the "Registrant" or "Company") a
wholly-owned subsidiary of 1st Miracle Group Inc., a Canadian Corporation (the
"ultimate parent"), received on July 7, 2000 a letter dated June 29, 2000 from
its former accountant, Berg & Company LLP ("Berg"), in response to the
disclosure contained in the Company's report filed on Form 8-K/A on June 19,
2000. A copy of Berg's letter is annexed hereto as Exhibit 16.2
Berg had issued a qualified opinion to its independent accountants'
report on October 5, 1999 for the fiscal year ended April 30, 1999. The ultimate
parent disagreed with the qualification in the Berg report for the consolidated
financial statement and engaged Goldstein and Morris, Certified Public
Accountants, ("Goldstein and Morris") P.C. as a special consultant to review the
qualification contained in the Berg report. Goldstein and Morris advised that in
accordance with SAS No. 58(AU508), a qualified opinion should be rendered only
when there is a scope limitation, departure from generally accepted accounting
principles or a going concern issue. Additionally, the special consultant
further advised that a qualified opinion should not be issued when there is an
uncertainty or contingency not determinable as long as the uncertainty or
contingency was not due to a scope limitation. As a result of the foregoing, the
ultimate parent believes that the "Except for" qualification contained in the
Berg report for the fiscal year ended April 30, 1999 is not proper. Annexed
hereto as Exhibit 16.1, and previously included in the Company's 8-K
report, is a copy of the special consultant's report transmitted
to Berg by the Company.
For the first time, in the Berg letter of June 29th, Berg claims that
field work was insufficient to make a determination regarding compliance with
U.S. securities laws. Berg was provided full cooperation in connection with its
audit for the fiscal year ended April 30, 1999.
No claim or notification of a scope limitation was made by Berg until
the letter dated June 29, 2000. The ultimate parent and the Company disagree
with the claim by Berg that a scope limitation was imposed by management. The
Berg letter stated that the scope limitation resulted from "circumstances of the
engagement rather than restrictions imposed directly by ... management". No
limitation was imposed on the scope of the Berg audit nor at any time during
Berg's engagement did Berg provide written notice to the Board of Directors of a
scope limitation and that Berg would issue a qualified opinion.
<PAGE>
Berg was retained to audit consolidated financial statements for the
specific purpose of filing the consolidated statements with the Ontario
Securities Commission as was required. The consolidated financial statements
were included in prior filings of the Company with the Securities and Exchange
Commission for informational purposes only and, as such, the consent of Berg was
not required prior to their inclusion in the filings.
No written notification was received from Berg during its engagement
concerning the need to expand internal controls, or that there was a deficiency
with respect to the controls; that there was a need to develop more reliable
financial statements; or that Berg was unable to rely upon management's
representation; or that the former accountant would be unwilling to be
associated with the financial statements prepared by management. The first and
only notification received concerning claimed deficiencies was the Berg letter
dated June 29, 2000.
EXHIBITS
16.1 Copy of Goldstein and Morris findings letter
dated May 4, 2000.
16.2 Copy of Berg & Company LLP letter dated June 29, 2000.
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.
Dated: West Hollywood, CA
July 12, 2000
MIRACLE ENTERTAINMENT, INC.
f/k/a 1st MIRACLE GROUP, INC.
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(Registrant)
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Clifford D. Brune
Chief Financial Officer
