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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): MAY 22, 1995
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COMPREHENSIVE CARE CORPORATION
(Exact name of registrant as specified in Charter)
DELAWARE 0-5751 95-2594724
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
4350 VON KARMAN AVENUE, SUITE 280, NEWPORT BEACH, CALIFORNIA 92660
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(Address of principal executive offices) (zip code)
(714) 798-0460
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(Registrant's telephone number, including area code)
16305 SWINGLEY RIDGE DRIVE, SUITE 100, CHESTERFIELD, MISSOURI 63017
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(Former name, former address and former fiscal
year, if changed, since last report)
Exhibit Index on Page 3 of 4 Pages
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On May 22, 1995, Arthur Andersen & Co. ("AA"), the Company's
independent accountants, advised the Company that the Company did not meet AA's
client profile so as to enable AA to proceed with the Company's audit for the
fiscal year ending May 31, 1995 because to do so. The Company was not advised
as to what AA's client profile was or in what respects the Company did not meet
it. In addition, representatives of AA further advised the Company that, in
view of the fact that the Company intended to file, or update by reference to
current filings, various registration statements under the Securities Act of
1933, as amended, including registration statements on Form S-8 relating to the
registration of its Common Stock under its existing stock option plans, the
proposed registration of shares of Common Stock of the Company which may be
sold by certain selling shareholders, and the registration of shares of Common
Stock to be issued in order to fund payments to certain debentureholders of the
Company in exchange for their debentures, that AA would decline to furnish the
Company with the necessary consents, as required under Rule 439 of the General
Rules and Regulations of the Securities Act of 1933, as amended, to be named as
an experts or to use fiscal 1993 and fiscal 1994 audit reports, which consents
are required to be filed as an exhibit to such proposed registration
statements. Accordingly, AA advised the Company that, if the Company does not
engage new auditors, AA intends to resign as the Company's auditors.
In view of the position taken by AA, the Board of Directors of
the Company has suggested that management will proceed to interview, and
ultimately to engage, new independent auditors to audit and report upon the
financial statements for the fiscal year ending May 31, 1995 and any prior
fiscal years as may be necessary by reason of AA's position. The Company is
unable to presently assess the delay occasioned by reason of the position taken
by AA, the added expenses which it will incur and other financial and business
ramifications.
The Company has interviewed representatives of AA, who have confirmed,
with respect to each of the last two fiscal years and the subsequent interim
period, each of the following to the Company's management
(i) There have never been any questions concerning the
integrity of the 1993 or 1994 financial statements.
(ii) There have never been any questions concerning the
quality or condition of the accounting books and records.
(iii) There have never been any disagreements between the
Company and AA as to accounting policies or principles in connection with the
fiscal 1993 or 1994 financial statements.
(iv) There have never been any audit scope or financial
statement disclosure disagreements or issues.
(v) There have never been any problems with management or
the cooperation of management.
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(vi) There has never been any advisory by AA that the
scope of the audit of the Company needed to be expanded.
(vii) AA has confirmed to the Company that there was no
information that came to AA's attention that if further investigated may
materially impact its reports or the Company's financial statements.
(viii) There has not been any absence or breakdown of the
internal controls.
(ix) The 1993 and 1994 presentation by AA to the Company's
Audit Committee confirmed the adequacy of reserves, that management adequately
addressed the Company's problems and uncertainties, the non-existence of any
disputes, or disagreements, and the absence of material weaknesses in internal
controls.
A copy of this Report on Form 8-K has been furnished to AA
pursuant to Item 304(a)(3) of Regulation S-K under the General Rules and
Regulations of the Securities Act of 1933, as amended. The Company has
requested AA to furnish the Company with a letter addressed to the Securities
and Exchange Commission stating whether AA agrees with the statements made by
the Company and, if not, stating in which respects it does not so agree. The
Company has requested any such letter to be submitted to it as promptly as
possible so that any such letter may be filed by the Company within 10 business
days following the filing of this Report. Any such letter will be filed by
amendment to this Report within two business days after receipt of any such
letter.
AA's report on the Company's financial statements for fiscal years
1993 and 1994 contained a qualification as to the uncertainty of the
presentation of financial information on a going concern basis.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
None.
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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.
COMPREHENSIVE CARE CORPORATION
(Registrant)
By: /s/ Drew Q. Miller
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Drew Q. Miller, Vice President and
Chief Financial Officer
Dated: May 25, 1995
