SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
AMENDMENT NO. 1
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): March 21, 1995
Cayman Resources Corporation
(Exact name of registrant as specified in its charter)
Oklahoma 0-13337 73-1129531
(State of (Commission File No.) I.R.S. Employer
Incorporation) Identification No.)
601 South Boulder, Ste 500, Tulsa, Oklahoma 74119-1323
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: 918-587-4470
Not Applicable
(Former name or former address, if changed since last report.)
Page 1 of 9 consecutively numbered pages.
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Item 4.Changes in Registrant's Certifying Accountant.
1. On March 21, 1995, the Registrant received a letter from its auditors,
Arthur Andersen & Co., S.C. (AA) declining to stand for re-election as auditor
for the Registrant. AA's report on the Registrant's financial statements during
the two most recent fiscal years and all subsequent interim periods preceding
the date hereof contained a disclaimer of opinions. This disclaimer was filed
with
the Securities and Exchange Commission on November 4, 1994, on Form 8-K. A copy
of AA's disclaimer opinion is attached hereto as Exhibit 1.
Furthermore, during the last two fiscal years and the subsequent interim
period to the date hereof, there were no disagreements between the Registrant
and
AA on any matters of accounting principles or practices, financial statements
disclosure, or auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of AA, would have caused it to make a reference to the
subject matter of the disagreements in connection with its reports.
Furthermore, none of the "reportable events" described in Item
304(a)(1)(ii) of Regulation S-K occurred with respect to the Registrant within
the last two fiscal years and the subsequent interim period to the date hereof.
2. Effective March 21, 1995, the registrant engaged Hammert, Bolka & Mikysa
(HB&M) as its principal accountants. HB&M and the Registrant have agreed that
HB&M is to perform an audit of the Registrant's financial statements for the
period ending December 31, 1994. This change in auditors was agreed to after
careful consideration by the Registrant's management and Board of Directors.
During the last two fiscal years and the subsequent interim period to the date
hereof, the Registrant did not consult HB&M regarding any of the matters or
events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
Item 7. Financial Statements and Exhibits.
1. Disclaimer Opinion Letter from Arthur Andersen & Co., S.C. dated August
30, 1994, and filed September 2, 1994 with the Securities and Exchange
Commission as incorporated in the Registrant's annual report of Form 10-
KSB for the year ending December 31, 1993.
1. Decline letter from Arthur Andersen & Co., S.C. dated March 20, 1995.
2. Letter Agreement between Cayman Resources Corporation and Hammert, Bolka
& Mikysa dated March 16, 1995, and executed by the registrant on March
21, 1995.
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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 in its behalf by the
undersigned hereunto duly authorized.
Cayman Resources Corporation
DATED: March 24, 1995 By:
David M. Whitney, President and
Chief Executive Officer
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INDEX TO EXHIBITS
SEC
Exhibit No. Description of Exhibits Page
1 Disclaimer Opinion Letter
of Arthur Andersen & Co., S.C. 5
1 Decline letter
from Arthur Andersen & Co., S.C. 8
2 Letter Agreement between
Cayman Resources Corporation
and Hammert, Bolka & Mikysa 9
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EXHIBIT 1 TO FORM 8-K
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of
Cayman Resources Corporation:
We have audited the accompanying consolidated balance sheet of Cayman Resources
Corporation (an Oklahoma corporation) and subsidiaries as of December 31, 1993,
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the two years in the period ended December 31, 1993.
These financial statements and the schedules referred to below ae the
responsibiity of the Company's management. Our responsibility is to report on
these financial statements and schedulles based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our report.
As discussed in Note 1 to the Consolidated Financial Statements, the Company has
historically incurred net losses from operations and had a working capital
deficit of $2,826,130 as of December 31, 1993. The Company began refinery
operations in early 1994 after extensive renovation and clean up expenditures.
To successfully operate the refinery in the future will require a substantial
amount of funds, which the Company will likely be required to obtain from
external financing sources. At this time, the Company does not have such
financing available and it is not possible to determine whether such funds can
be obtained by the Company. Additionally, the Company has no control over the
margins between the cost of the products produced and the price it will receive
for refined products, which are determined by the market place. Without
adequate
demand for the solvents and products produced by the refinery, the Company will
not be able to conduct successful refinery operations. Management's plan in
regard to these matters is described in Note 1. It is not possible to predict
the ultimate outcome of these matters. The consolidated financial statements do
not include any adjustments that might result from the outcome of these
uncertainties.
Because of the significance of the matters discussed in the preceding paragraph,
we are unable to express, and we do not express, an opinion on the consoldiated
financial statements referred to above.
Our audits were mde for the purpose of reporting on the basic consolidated
financial statements taken as a whole. The schedules listed in the index to the
consolidated financial statements are presented for purposes of complying with
the Securities and Exchange Commission's rules and are not part of the basic
consolidated financial statements. These schedules have been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements. Because of the significance of the matters discussed in the second
preceding paragraph, we are unable to express, and we do not express, an opinion
on these schedules.
/s/
ARTHUR ANDERSEN & CO.
Oklahoma City, Oklahoma
August 30, 1994
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EXHIBIT 2 TO FORM 8-K
ARTHUR ANDERSEN & CO., S.C.
Suite 1200
20 Broadway
Oklahoma City, OK 73102-8286
(405) 236-1491
March 20, 1995
Mr. David Whitney
President
Cayman Resources Corporation
Petroleum Building, Ste 500
Tulsa, Oklahoma 74119
Dear Mr. Whitney:
This is to confirm that the client-auditor relationship between Cayman Resources
Corporation (Commission File Number 0-13337) and Arthur Andersen LLP has ceased.
Very truly yours,
/s/
ARTHUR ANDERSEN LLP
Copy to: Chief Accountant
Securities and Exchange Commission
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EXHIBIT 3 TO FORM 8-K
HAMMERT BOLKA & MIKYSA
3030 NW Expressway, Suite 502
Oklahoma City, OK 73112
(405) 948-7284
Fax (405) 948-7324
March 16, 1995
Mr. David M. Whitney, President
Cayman Resources Corporation
601 South Boulder, Ste 500
Tulsa, Oklahoma 74119-1323
Dear Mr. Whitney:
In accordance with our conversation today, we are pleased to confirm our
understanding of the services we are to provide for Cayman Resources Corporation
(Company) for the year ended December 31, 1994.
We will audit the balance sheet of the Company as of December 31, 1994, and the
related statements of income, retained earnings, and cash flows for year then
ended as well as the required schedules to be included in the Form 10K filing
with the SEC.
Our audit will be conducted in accordance with generally accepted auditing
standards and will include tests of your accounting records and other procedures
we consider necessary to enable us to express an opinion regarding your
financial
statements and related schedules. Our work probably will determine that we will
be unable to render an opinion as to the fairness of the financial position of
the Company because of uncertainties relating to operating losses of the Company
and its ability to operate its refinery of a profitable basis in the future. We
will not issue a report as a result of this engagement unless we have an
agreement of all parties involved when our work is completed.
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, tests of the physical existence of
inventories, and direct confirmation of cash and note holders by correspondence
with selected creditors and banks. We will request written representations from
your attorney as part of the engagement, and they may bill you for responding to
this inquiry. At the conclusion of our audit, we will also request certain
written representations from you about the financial statements and related
matters.
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An audit includes examining, on a test basis, evidence supporting the amounts
and
disclosures in the financial statements; therefore, our audit will involve
judgment about the number of transactions to be examined and the areas to be
tested. Also, we will plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
However, because of the concept of reasonable assurance and because we will not
perform a detailed examination of all transactions, there is a risk that
material
errors, irregularities, or illegal acts, including fraud or defalcations, may
exist and not be detected by us. We will advise you, however, of any matters of
that nature that come to our attention. Our responsibility as auditors is
limited to the period covered by our audit and does not extend to any later
periods for which we are not engaged as auditors.
We understand that you will provide us with the basic information required for
our audit and that you are responsible for the accuracy and completeness of that
information. Arthur Andersen & Co., the former Company auditors, will be
contacted and requested to allow us to examine their audit work-papers for prior
years' work performed by them. We will advise you about appropriate accounting
principles and their application and will assist in the preparation of your
financial statements, but the responsibility for the financial statements
remains
with you. This responsibility includes the maintenance of adequate records and
a related internal control structure, the selection and application of
accounting
principles, and the safeguarding of assets.
Our audit is not specifically designed and cannot be relied on to disclose
reportable conditions, that is, significant deficiencies in the design or
operation of the internal control structure. However, during the audit, if we
become aware of such reportable conditions or ways that we believe management
practices can be improved, we will communicate them to you in a separate letter.
Our fees for these services will be based on the actual time spent at our hourly
rates discussed with you today of $90 for partners, $60 for in-charge field
personnel and $50 for assistants, plus travel and other out-of-pocket costs. As
we discussed today, we request a beginning fee advance of $4,000 and when our
charges reach this advance, we will bill additional charges as our work
progresses and request prompt payment when billings are made.
We appreciate the opportunity to be of service to you and believe this letter
accurately summarizes the significant terms of our engagement. If you have any
questions, please let us know. If you agree with the terms of our engagement as
described in this letter, please sign
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the enclosed copy and return to us, and this letter will continue in effect
until
canceled by either party.
Very truly yours,
HAMMERT BOLKA & MIKYSA
By: /s/
Ed Bolka
This letter correctly sets forth the understanding of Cayman Resources
Corporation.
By: /s/ 3-21-95
David M. Whitney, President Date
Page 9 of 9 consecutively numbered pages.
