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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
February 28, 1997
Commission File Number: 0-9969
Century Industries, Inc.
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(Exact name of Registrant as specified in its charter)
District of Columbia 54-1100941
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(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
45034 Underwood Lane
Sterling, Va. 20166
(Mail) P.O. Box 319
Sterling, Va. 20167
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 471-7606.
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: Common
Stock, par value $.001 per share
Name of each exchange on
Title of each class which registered
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Common Voting Stock NASDAQ Bulletin Board
Securities registered pursuant to Section 12(g) of the Act:
Common Stock (Par Value $.001 per share)
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(Title of Stock)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
(1) Yes X No
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(2) Yes X No
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ITEM 5. Other Events
Changes in Registrant's Auditor
The Registrant determined to dismiss, and accepted the resignation of, its
auditor, Donna Miller & Associates, effective February 24, 1997. In
conformance with Reg Section 229.304, the Registrant states:
(i) The Registrant's General Counsel recommended to its Board the
dismissal of Donna Miller & Associates as the Registrant's auditor. The Board
approved the recommendation and, subsequently, on February 24, 1997, Donna
Miller & Associates resigned by letter to Registrant.
(ii) The Donna Miller & Associates 1994 and 1995 audited financial
reports of Registrant did not contain either an adverse opinion or disclaimer.
(iii) The decision to change auditors was recommended by:
(A) The Company's General Counsel who found auditor's non-accounting
actions intolerable, and this recommendation was
(B) Approved by Registrant's Board of Directors.
(iv) Registrant has never differed with its auditor as to past audited
statements, although it is possible that disagreements would have arisen in
forthcoming audited filings. Neither General Counsel nor the Board determined
to terminate Donna Miller & Associates based upon audit issues. The
termination was based upon the joint determination (both by the Board and
General Counsel) that Donna Miller & Associates' implication Registrant was in
violation of issues in the legal realm unrelated to accounting, the like of
which was both specious and ludicrous. General Counsel had fully investigated
these allegations and
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found no supporting evidence. Upon General Counsel's request for factual
information to Donna Miller & Associates in willingness to revisit these
matters, Donna Miller & Associates refused to cooperate in providing the
requested factual information. General Counsel considers this conduct both
improper, obstructionist and intolerable.
(v)(A) The former auditor did advise Registrant, by letter dated January
30, 1997, that it considered the books, records and internal controls of one of
the Registrant's subsidiaries, U.S. Insurance Brokers, Inc., to be inadequate
on the issues of a) written contracts and/or invoices from consultants
supporting payments made, b) inadequate wire transfer documentation, c)
inappropriate expense volume paid by U.S. Insurance Brokers from preferred
stock proceeds, and d) lack of response upon check writing activities and
inappropriate check signatory - directing that the signatory should be an
officer or director of the Registrant's subsidiary.
The Registrant had no objection to its former auditor's identifying these
issues until auditors from Registrant's insurance subsidiaries advised this was
not the case. Then it became evident to General Counsel that the auditor's
conduct was intolerable in non-accounting areas, thus mandating the finalized
termination.
(v)(B) The former auditor never advised the Registrant it was no longer
able to rely on management's representations, or that it was unwilling to be
associated with Registrant's financial statements.
(v)(c)(1) The former auditor never advised Registrant of any need to
expand the scope of the audit, nor did it ever state it had covered information
that, if further investigated, may
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(i) materially impact the fairness or reliability of either: a
previously issued audit report or underlying financial statements; or financial
statements issued or to be issued covering fiscal periods subsequent to the
date of most recent financial statements covered by audit, or
(ii) cause the auditor to be unwilling to rely on management's
statements or be associated with its financial statements, and
(2) the auditor's dismissal did not cause the expansion of the
scope of the audit, nor did auditor conduct any further investigation, nor did
the auditor cooperate with General Counsel's efforts to investigate non-audit
issues, nor
(d)(1) Did the auditor advise Registrant of information it concluded
materially impacted the fairness or reliability of (i) a previously issued
audit report, nor (ii) the financial statements issued or to be issued which,
based upon such facts, would prevent the auditor from rendering an unqualified
audit report.
(2) The auditor raised vacuous issues relating to legal matters and
potential violations which were investigated by General Counsel and found
meritless. Upon further request by General Counsel for refined factual
information to re-open such investigation, the auditor has refused such
request, thus the auditor may not be satisfied with the legal resolution of the
issues at law it felt existed. None of these legal issues, however, are
accounting issues.
(3) Registrant has engaged Correa, Berger & Associates, 67 Wall Street,
2nd Floor, New York, New York, 10005, to act as the new independent auditor and
have engaged such independent auditor in
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February, 1997, and has not conferred with such new auditor during the two most
recent fiscal years or any interim period.
(4) Registrant is providing the former auditor with the disclosures it
has made in response to Item 304(a) to be received as of the date of this
filing, and, by covering letter, has requested a letter response thereto
addressed to the Commission and shall, upon receipt, file such response in an
updated registration statement under this provision. Registrant requests such
response within ten (10) business days and shall file the same within two (2)
days of its receipt.
Comment on Instructions to Item 304
Registrant notes the term "disagreements" is to be interpreted broadly.
Registrant found the former auditor's "practice of law" to be burdensome, time
consuming and flat out wrong. Registrant may never be able, through its
General Counsel, to satisfy the former auditor that its legal theories are
wrong because, in spite of General Counsel's insistence, the former auditor has
not complied with General Counsel's request for detailed factual information to
facilitate a complete resolution of legal issues.
Registrant, through its General Counsel, has demanded this factual
information by March 7, 1997, copying both the Commission and the Office of the
United States Attorney for the District of Columbia as to this fact.
The differences and disagreements in substance experienced here with the
auditor relate, in principal part, not to the former auditor's accounting
function, but to its practice of law.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
February 28, 1997
Century Industries, Inc.
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Theodore L. Schwartzbeck, President & CEO
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