Securities and Exchange Commission
Washington, D.C. 20549
Form 8-KSB/A
Current Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): August 17, 1999
AmeriNet Group.com, Inc. formerly known as Equity Growth Systems, inc. (Exact
name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation
0-3718 (Commission File Number)
11-2050317 (IRS Employer Identification No.)
902 Clint Moore Road, Suite 136: Boca Raton, Florida 33487
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (561) 998-3435
Equity Growth System, inc., 8001 DeSoto Woods Drive; Sarasota, Florida 34243
(Former name or former address, if changed since last report)
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TABLE OF CONTENTS
Item Description Page
Number Number
Disclosure of materials incorporated by 2
reference
Safe harbor statement regarding forward 2
looking information
Item 4. Changes in Registrant's Certifying Accountant 3
Item 7. Financial Statements and Exhibits 6
Signatures 6
Sources of Materials Incorporated by Reference
This report includes materials incorporated by reference from the
following previously filed reports or registration statements, as permitted by
Exchange Act Rule 12b-23: Reports on Form 8-KSB filed on April 1,1999, July 12,
1999 and the form 10-KSB for year ended December 31, 1998.
FORWARD LOOKING STATEMENTS
This Form 8-KSB contains certain "forward-looking statements" relating to
the Registrant which represent the Registrant's current expectations or beliefs,
including, but not limited to, statements concerning the Registrant's
operations, performance, financial condition and growth. For this purpose, any
statements contained in this Form 8-KSB that are not statements of historical
fact are forward-looking statements. Without limiting the generality of the
foregoing, words such as "may", "will", "expect", "believe", "anticipate",
"intend", "could", "estimate", or "continue", or the negative or other variation
thereof or comparable terminology are intended to identify forward-looking
statements. These statements by their nature involve substantial risks and
uncertainties, such as credit losses, dependence on management and key personnel
and variability of quarterly results, ability of the Registrant to continue its
growth strategy and competition, certain of which are beyond the Registrant's
control. Should one or more of these risks or uncertainties materialize or
should the underlying assumptions prove incorrect, actual outcomes and results
could differ materially from those indicated in the forward looking statements.
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Item 4. Changes in Registrant's Certifying Accountant
This item amends Item 4 of the Registrant's current report on Form 8-KSB
filed with the Commission on July 12, 1999. The following exhibits information
are filed as exhibits to this report, see "Item 7(c), Exhibit Index:" a letter
from Bowman & Bowman, P.A. (the "Bowman Firm"), dated August 2, 1999 (the
"Bowman Letter"); a letter and a facsimile transmission in the form of a note
accompanied by an excerpt from a draft of Item 4 of the Registrant's current
report on Form 8-KSB filed by the Registrant with the Commission on July 12,
1999, all provided to the Registrant's general counsel by Penny Adams Field
("Mrs. Field"), the chairperson of the Registrant's audit committee on August
13, 1999 (the "Field Documents"); and, a letter from Yankee Companies, Inc.
("Yankees"), dated August 15, 1999 (the "Yankees Letter").
In conjunction with the Registrant's decision on July 9, 1999, to retain
the firm of Daszkal, Bolton & Manela, P.A. (the "Daszkal Firm") to conduct its
next annual audit, rather than to continue using the firm of Bowman & Bowman,
P.A. (the "Bowman Firm"), which prepared the Registrant's audit for the year
ended December 31, 1998, the Registrant hereby provides the following
representations required by Item 304 of Regulation SB:
(a)(1)The Registrant changed its principal independent accountant during its
last fiscal year (the year ended December 31, 1998) and for the current fiscal
year:
(i)In each case, the decision was made by the Registrant and the former
accountants did not resign, decline to stand for re-election nor were they
dismissed; rather, in each case, their engagements were for a single project and
the decision to engage other auditors for the next fiscal year was made based on
factors such as geographic proximity to the Registrant's principal offices and,
in the latest case, a pre-existing relationship with a corporation acquired by
the Registrant which is expected to account for almost all of the Registrant's
operations during the current fiscal year. The firm of Baum & Company, P.A. (the
"Baum Firm"), was replaced by the Bowman Firm on or about March 5, 1999; and the
Bowman Firm was replaced by the Daszkal Firm on or about July 9, 1999. A copy of
the Registrant's engagement agreement with the Daszkal Firm, executed by the
Registrant on August 2, 1999, is included as an exhibit to this current report,
see Item 7(c), Exhibit Index."
(ii)The reports of the Registrant's principal accountants for the past two
years did not contain any adverse opinions or disclaimers of opinions, nor were
they modified as to uncertainty, audit scope, or accounting principles, except
as follows: the Registrant's audit by the Baum Firm for the year ended December
31, 1997, contained a qualification as to scope, which read as follows: "We were
unable to obtain a discussion or evaluation from the Company's [the Registrant]
outside legal counsel of pending or threatened litigation described in Note 14"
(see audit report letter of the Baum Firm, included in the Registrant's report
on Form 10-KSB for the year ended December 31, 1997). The attorney in question
was David Albright, Esquire of Albright, Brown, and Goetemiller, 120 East
Baltimore Street, Suite 2150; Baltimore, Maryland 21202. Mr. Albright was
familiar and involved with litigation involving assets in which the Registrant
had an indirect interest, however, he failed or refused to communicate with
attorneys or accountants for the Registrant responsible for filing the Forms
10-KSB for 1997 and 1996. See the details discussed in Part I, Item 3, Legal
Proceedings" of the Registrant's reports on Form 10-KSB for the years ended
December 31. 1996 and 1997, including copies of letters sent to Mr. Albright
filed as exhibits thereto. In light of the Registrant's disposition of the
operations and assets involved, current management is of the opinion that such
qualification has no relevance to its current or proposed future operations.
(iii)The decision to engage the Bowman Firm rather than the Baum Firm for
the Registrant's audit for the year ended December 31, 1997 was made at the
insistence of Mrs. Field, an outside director who chairs the Registrant's audit
committee and was recommended or approved by the Registrant's board of
directors. The decision to engage the Daszkal Firm rather than the Bowman Firm
for the current year's audit was made by the Registrant's board of directors in
conjunction with the Registrant's acquisition of American Internet Technical
Center, Inc., a Florida corporation ("American Internet"), based on the Daszkal
Firm's pre-existing relationship as auditor for American Internet. Based on the
Registrant's records and on inquiries to the Bowman Firm, their auditor-client
relationship ended when the Bowman Firm received Mrs. Field's fax on or about
July 9, 1999; however, the Bowman Firm's final services for the Registrant on
matters other than compliance with the requirements of Item 304 of Regulation SB
were rendered on or about May 26, 1999, when the Registrant filed its report on
Form 10-KSB for the year ended December 31, 1998.
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(iv)(A)The Registrant does not believe that there were any disagreements
with the Baum or Bowman Firms, whether or not resolved, on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which, if not resolved to their satisfaction would have
caused them to make reference to the subject matter of the disagreement(s) in
connection with their reports. However, as disclosed in Item 8 of the
Registrant's report on Form 10-KSB for the year ended December 31, 1998, the
Registrant disagreed with the Bowman Firm's characterization of certain portions
of the Registrant's agreement with the Yankee Companies, Inc., a Florida
corporation that serves as the Registrant's strategic consultant ("Yankees"),
including the description of the services to be provided and the basis for
calculating the compensation payable to Yankees. A very detailed discussion of
the nature of the disagreement, including detailed quotes from the subject
agreement is included in Item 8 of the Registrant's report on Form 10-KSB for
the year ended December 31, 1998, and is incorporated herein by reference. In
addition, in conjunction with the Registrant's audit for the year ended December
31, 1997, Mrs. Field, as the chairperson of the Registrant's audit committee,
determined that the Baum Firm should be replaced by the Bowman Firm for purposes
of conducting the audit of the Registrant's financial statements based on
geographic convenience, but also noting in the current report on Form 8-KSB
filed on March 5, 1999, reporting the change, the membership of the Bowman Firm
in the AICPA's securities practice section, and its successful peer review
associated with such membership. The Registrant disclosed such decision in a
manner that the Baum Firm felt implied that it was not a member of the AICPA's
securities practice section, and that it had not successfully concluded a peer
review associated with such membership. The Registrant made clear in an
amendment to the related current report on Form 8-KSB filed on March 30, 1999,
that it did not intend to make the implication objected to.
(B) The Registrant does not believe that its former auditors ever advised
the Registrant that:
(1) internal controls necessary to develop reliable financial statements
did not exist; or
(2) information had come to their attention which made them unwilling
to rely on management's representations, or unwilling to be
associated with the financial statements prepared by management; or
(3) the scope of the audit should be expanded significantly, or
information had come to their attention that they had concluded
would, or if further investigated might, materially impact the
fairness or reliability of a previously issued audit report or
the underlying financial statements, or the financial statements
issued or to be issued covering the fiscal period(s) subsequent
to the date of their most recent audited financial statements
(including information that might preclude the issuance of an
unqualified audit report), and the issue was not resolved to the
accountant's satisfaction prior to its resignation or dismissal;
(2) During the Registrant's last two fiscal years, it engaged new
accountants as its principal accountant to audit its financial statements. On or
about March 5, 1999, it engaged the Bowman Firm, rather than its former
accountant, the Baum Firm; and, on or about July 9, 1999, it engaged the Daszkal
Firm rather than the Bowman Firm.
(3) The Registrant has provided the Bowman Firm with draft copies of Item 4
of this current report and received various comments, which it has either
incorporated herein or discusses below and requested that the Bowman Firm
furnish a letter addressed to the Commission stating whether it agrees with the
foregoing statements made by the Registrant and, if not, stating the respects in
which it does not agree. The Bowman Firm has provided the Registrant with a
letter filed as an exhibit to this current report on Form 8-KSB [see "Item
7(c), Exhibit Index"] which reads as follows:"With the changes made in the draft
dated today 8/17/99 to Item 4 and the changes we discussed verbally regarding
the "Field letter" we Bowman & Bowman are in agreement with the contemplated
disclosures in Equity Growth's 8-KSB. This memo is addressed to Equity Growth
and Item 4-(a)(3) needs to reflect the fact that no notice is being sent
directly to the Commissioner or to the SEC but that this acknowledgement may be
attached to the 8-KSB."
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In conjunction with the disclosure originally provided by the Registrant in
response to Item 304 of Regulation SB pertaining to the engagement of the
Daszkal Firm, the Baum Firm noted two objections, one of which has led to the
amendment effected hereby. The Bowman Firm's letter to the Commission and the
Registrant dated August 2, 1999 (the "Bowman Letter"), states as follows:
"1. We are in disagreement with Item 4, second paragraph subsection (ii).
The Company [Registrant] received a qualified opinion (scope limitation)
on their December 31, 1997 financial statements per their Form 10K [10-KSB]
filed July 1, 1998.
2. We are in disagreement with the last paragraph in Item 4, which states we,
Bowman & Bowman PA, were contacted and that a copy of the disclosure was
provided to us prior to the issuance of the Form 8-K. As of today August 2,
1999 we have not received any written communication including fax or E-mail
regarding the dismissal of our firm or the issuance of the July 12, 1999
Form 8-K. We discovered the issuance of the July 12, 1999 Form 8-K through
a routine search, on July 30, 1999, of SEC filings that we make each month.
Had it not have been for our search we would still not know that the 8-K
had been issued.
Other than items 1 and 2 above Bowman & Bowman PA has no disagreements with
the disclosures made in Item 4 of the Form 8-K dated July 12, 1999."
The Registrant agrees that its audit for the year ended December 31, 1997,
contained a qualification as to scope, as discussed above [see paragraph
(a)(1)(ii)].
With reference to the Bowman Firm's assertions that it was not contacted
prior to filing of the Registrant's current report on Form 8-KSB on July 12,
1999, the Registrant was advised in the Field Documents by Mrs. Field (who
served as the Registrant's contact person with the Bowman Firm and who was
assigned responsibility for advising the Bowman Firm that the Daszkal Firm had
been selected to conduct the Registrant's next audit), that:
* On or about July 7, 1999, she notified the Bowman firm by voice mail and by
fax that the Registrant intended to engage new auditors. A copy of the
materials faxed by Mrs. Field to the Bowman Firm is included as a component
of the Field Documents, filed as an exhibit to this current report, see item
7(c), Exhibit Index."
* On or about July 8, 1999, Mrs. Field spoke directly to Mr. Larry Bowman,
a principal of the Bowman Firm about the engagement of the new auditors.
In addition to the representations in the Field Documents, the president of
Yankees disclosed to the Registrant's general counsel in the Yankees Letter
that:
* In a telephone conversation initiated by Mr. Bowman on July 12, 1999, Mr.
Bowman acknowledged that the Registrant had engaged another firm as its
auditors and requested that Yankees arrange for final payment of the Bowman
Firm's statement.
* On July 21, 1999, the Bowman Firm deposited a check issued by the Registrant
and marked "final payment."
On August 3, 1999, the Registrant's general counsel received a faxed copy
of a letter from the Bowman Firm confirming that the client-auditor relationship
between the Registrant and the Bowman Firm had ended.
While the disagreement between the Registrant and the Bowman Firm
concerning communication of the matters discussed above does not appear to
involve a material matter, the Registrant felt compelled by the issues raised by
the Bowman Firm to investigate the matter and to reach its own conclusions with
reference thereto, especially as they involved the credibility of the
chairperson of its audit committee. Based on the representations in the Yankees
Letter, the Field Documents and the prior experience of the Registrant's general
counsel in attempting to communicate with the Bowman Firm during the
Registrant's audit for the year ended December 31, 1999, the Registrant's
management has concluded that the Field Documents are accurate.
The Bowman Firm has requested that the following statement be included in
conjunction with the foregoing discussion, as its response thereto. "The firm of
Bowman and Bowman feels that they were not notified in a timely manner making it
impossible for them to notify the SEC on a timely basis of their dismissal and
approval of the subsequent [sic] issued 8-KSB dated July 12, 1999."
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Item 7.Financial Statements and Exhibits
(c) Exhibits
Item Page Description
Number Number
10.38 7 Engagement letter for Daskal, Bolton, Manela, P.A., dated July 9,
1999.
16.3 10 Letter re change in Registrant's certifying accountant dated
August 17, 1999.
99.39 11 Letter from Bowman and Bowman, P.A. to SEC dated August 2, 1999.
99.40 12 Letter from Bowman and Bowman confirming cessation of client-
auditor relationship dated August 2, 1999.
99.41 13 Letter from Penny Adams Field to G. Richard Chamberlin, Esq.
dated August 13, 1999.
99.42 14 Cover letter and enclosure represented to have been faxed to
Bowman and Bowman from Penny Adams Field.
99.43 15 Letter from The Yankee Companies, Inc. to G. Richard Chamberlin
dated August 9, 1999.
Signature
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.
AmeriNet Group.com, Inc.
A Delaware corporation
(Registrant)
Date: August 17, 1999
By: /s/ Michael H. Jordan/s/
Michael H. Jordan, President
6
DASZKAL, BOLTON, MANELA, DEVLIN & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
A PARTNERSHIP OF PROFESSIONAL ASSOCIATIONS
2401 N.W. BOCA RATON BOULEVARD, SUITE 100 @ BOCA RATON, FLORIDA 3343
TELEPHONE (561) 367-1040 FAX (561) 750-3236
JEFFREY A. BOLTON, CPA, P.A.
MEMBER OF THE AMERICAN INSTITUTE
MICHAEL I. DASZKAL, CPA, P.A.
OF CERTIFIED PUBLIC ACCOUNTANTS
ROBERT A. MANELA, CPA, P.A.
TIMOTHY R. DEVLIN, CPA, P.A.
July 9, 1999
To the Board of Directors
Equity Growth Systems, Inc.
8001 Desoto Woods Drive
Sarasota, FL 34243
We are pleased to confirm our understanding of the services we are to provide
for Equity Growth Systems, Inc. for the six months ended June 30, 1999.
We will audit the balance sheet of Equity Growth Systems, Inc. as of June 30,
1999 and the related statements of income, retained earnings, and cash flows for
the period then ended.
The objective of our audit is the expression of an opinion about whether your
financial statements are fairly presented, in all material respects, in
conformity with generally accepted accounting principals. 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 such an opinion If our opinion is other than
unqualified, we will discuss the reasons with you in advance. If, for any
reason, we are unable to complete the audit or are unable to form or have not
formed an opinion, we may decline to express an opinion or issue a report as a
result of this engagement.
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, direct confirmation of receivables and
certain other assets and liabilities by correspondence with selected customers,
creditors, and banks. We will request written representations from your
attorneys 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.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; therefore, our audit will involve
judgement 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.
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,
fraud, or other illegal acts, may exist and not be detected by us. In addition,
an audit is not designed to detect errors, fraud, or other
7
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illegal acts that are immaterial to the financial statements. 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.
Our audit will include obtaining an understanding of internal control sufficient
to plan the audit and to determine the nature, timing, and extent of audit
procedures to be performed. An audit is not designed to provide assurance on
internal control or to identify reportable conditions, that is, significant
deficiencies in the design or operation of internal control. However, during the
audit, if we become aware of such reportable conditions, we will communicate
them to you.
We understand that you are responsible for making all financial records and
related information available to us and that you are responsible for the
accuracy and completeness of that information. 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
establishment and maintenance of adequate records and effective internal
controls over financial reporting, the selection and application of accounting
principles, and the safeguarding of assets. Management is also responsible for
identifying and ensuring that the entity complies with applicable laws and
regulations.
Because many computer systems use only two digits to record the year in date
fields, such systems may not be able to accurately process dates including the
year 2000 and after. The effects of this problem will vary from system to system
and may adversely affect your operations as well as the ability to prepare
financial statements. An audit of financial statements conducted in accordance
with generally accepted auditing standards is not designed to detect whether
your systems are year 2000 compliant. Further, we have no responsibility with
regard to your efforts to make your systems year 2000 compliant or to provide
assurance on whether you have addressed, or will be able to address, all of the
affected systems on a timely basis. These are your responsibilities. However, we
may choose to communicate matters that come to our attention relating to the
potential effects of the year 2000 on your computer systems.
We understand that your employees will prepare all cash, accounts receivable,
and other confirmations we request and will locate any documents selected by us
for testing.
Our fees for these services will be based on firm hourly rates which range from
$50 to $150 per hour. We expect our fees for the audit of the June 30, 1999,
financial statements in accordance with, generally accepted accounting
principles to be approximately $6,500 to $7,000. You will also be responsible
for travel and other out-of-pocket costs. Our invoices will be rendered as work
progresses and are payable on presentation. In accordance with our firm's
policies, work may be suspended if your account becomes overdue and will not be
resumed until your account is paid in full. We require a retainer of $4,000
prior to the commencement of the engagement.
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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 below and return the letter to us with a
retainer check for $4,000.
Very truly yours,
DASZKAL, BOLTON & MANELA
/s/ Michael I. Daskal
Michael I. Daszkal, CPA
Partner
RESPONSE:
This letter correctly sets forth the understanding of Equity Growth Systems,
Inc.
Officer Signature: /s/ Charles J. Scimeca
Title: President
Date: July 9, 1999
9
Bowman & Bowman, P.A.
Certified Public Accountants
1705 Colonial Blvd., Suite D-1
Fort Meyers, Florida 33907
(941) 939-2301
(941) 939-1297 (fax)
Date: 8/17/99
To: G. Richard Chamberlin
Mr. Chamberlin:
With the changes made in the draft dated today 8/17/99 to Item 4 and the changes
we discussed verbally regarding the "Field letter" we Bowman & Bowman are in
agreement with the contemplated disclosures in Equity Growth's 8-KSB. This memo
is addressed to Equity Growth and Item 4-(a)(3) needs to reflect the fact
that no notice is being sent directly to the Commissioner or to the SEC but that
this acknowledgement may be attached to the 8-KSB.
/s/ Larry Bowman
Larry Bowman
Bowman & Bowman P.A.
10
Bowman & Bowman, P.A.
Certified Public Accountants
1705 Colonial Blvd., Suite D-1
Fort Meyers, Florida 33907
(941) 939-2301
(941) 939-1297 (fax)
August 2, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Equity Growth Systems, inc., a Delaware corporation
Commission file number 0-3718
Dear Ladies and Gentlemen:
We were previously the independent accountants for the Company and on April 23,
1999 we reported on the financial statements of the Company for the year ended
December 31, 1998. On July 1, 1999 we were dismissed as the independent
accountants of Equity Growth Systems, Inc.
We have read the Company's statements included under Item 4 of its current
Report on Form 8-K dated July 12, 1999.
1.We are in disagreements with Item 4, second paragraph subsection(ii). The
Company received a qualified opinion (scope limitation) on their December 31,
1997 financial statements per their Form 10K filed July 1, 1998.
2.We are in disagreement with the last paragraph in Item 4, which states
we, Bowman & Bowman PA were contacted and that a copy of the disclosure was
provided to us prior to the issuance of the Form 8-K. As of today August 2, 199
9 we have not received any written communication including fax or E-mail
regarding the dismissal of our firm or the issuance of the July 12, 1999 Form
8-K. We discovered the issuance of the July 12, 1999 Form 8-K through a routine
search, on July 30, 1999, of SEC filings that we make each month. Had it not
have been for our search we would still not know that the 8-K had been issued.
Other than items 1 and 2 above Bowman & Bowman PA has no disagreements with the
disclosures made in Item 4 of the Form 8-K dated July 12, 1999.
Sincerely,
Bowman & Bowman, P.A.
11
Bowman & Bowman, P.A.
Certified Public Accountants
1705 Colonial Blvd., Suite D-1
Fort Meyers, Florida 33907
(941) 939-2301
(941) 939-1297 (fax)
August 2, 1999
Equity Growth Systems, inc.
440 East Sample Road, Suite 204
Pompano Beach, Florida 33060
Dear Sirs:
This is to confirm that the client-auditor relationship between Equity Growth
Systems, Inc. (Commission file number 0-3718) and Bowman & Bowman, PA has
ceased.
Sincerely,
Bowman & Bowman, P.A.
Cc: Office of the Chief Accountant
SECPS Letter file
Securities and Exchange Commission
Mail Stop 905
450 Fifth Street, N.W.
Washington, DC 20549
12
Executive Concepts
Executive Concepts
2424 Longboat Drive
Naples, FL 34104
August 13, 1999
G. Richard Chamberlain
Counsel
AmeriNet Group.com, Inc.
This letter should serve as confirmation that Bowman & Bowman, P.A., the
previous auditor for Equity Growth Systems, inc., was notified by the Chairman
of the audit committee the day prior to the 8K filing by voice mail that there
was to be an change in auditors. Due to the lack of availability of Mr. Bowman,
a conversation between the Penny Field (Chairman, Audit Committee) and Mr.
Bowman did not take place until late the following day. At that time Mr. Bowman
agreed to call Lenny Tucker of the Yankee Group and discuss his past engagement
and late payment of fees. He also agreed to speak with the new auditors
regarding any transition, submission of work papers, and required SEC
notifications regarding his response to the auditor change.
Following this conversation, Mr. Bowman read the 8K submission and felt the
wording in the paragraph regarding the Company's attempts to contact him
regarding the auditor change was not reflective of the extent of actual
communications. After reading the paragraph referred to by Mr. Bowman (see page
43 of the 8K) I agree that the wording strongly implies that Mr. Bowman was
uncooperative or uncompliant with the Registrant's wishes and SEC guidelines
regarding auditor changes. I recommend that the wording be modified to reflect
that voice mail and actual phone conversations were held between Mr. Bowman and
Mrs. Field and that each of those contacts were congenial and professional.
There is no evidence that Mr. Bowman was contacted by letter, fax, or e-mail by
members of the audit committee other than was has been stated above.
Please let me know if further clarification is necessary to set the record
straight.
Sincerely,
/s/ Penny Adams Field
Penny Adams Field
Chairman, Audit Committee
13
August 13, 1999
Richard
Here is a copy of what I had available to fax to Larry that weekend. Actual
fax date I believe was Thursday evening prior to Friday 8-K filing. (Left voice
mail Thursday evening & followed with fax)
/s/ Penny
ITEM 4. Changes in Registrant's Certifying Accountant
In conjunction with the acquisition described in response to Item Two, the
Registrant's management elected to replace its certified public accountants with
the certified public accountants employed by American Internet, since, for
accounting purposes, the bulk of the Registrant's auditing work will involve the
operations of American Internet and their auditors are closer geographically and
have substantially greater familiarity with the bulk of the books, records,
procedures and historical data required for future audits. There were no
disputes of any kind with the Registrant's prior auditors of which current
management is aware, after diligent inquiry, except for a dispute concerning the
language of footnotes to the financial statements for the year ended December
31, 1998, as disclosed in the Registrant's report on Form 10-KSB for such
period. Such disclosure (Item 8) is hereby incorporated by reference hereto and
a copy of the report on Form 10-KSB is filed as an exhibit to this report (see
"Item 7[c], Exhibit Index"). In conjunction therewith, while the Registrant
disclosed its differences in Item 8, the footnotes retained the language
selected by the auditor, Bowman & Bowman, P.A.
In amplification of the foregoing, current management, except as
disclosed in the preceding paragraph, has no reason to believe that:
(i) The Registrant's former auditors resigned, declined to stand
for re-election or were dismissed;
(ii) The principal accountant's report on the financial statements for either
of the past two years contained an adverse opinion or disclaimer of
opinion, or was modified as to uncertainty, audit scope, or accounting
principles
(iii) (A) There were any disagreements with the former accountant, whether
or not resolved, on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which,
if not resolved to the former accountant's satisfaction, would have
caused it to make reference to the subject matter of the
disagreement(s) in connection with its report; or
(B) The former accountant advised the Registrant that:
(i) internal controls necessary to develop reliable
financial statements did not exist; or
(ii) information has come to the attention of the former
accountant which made the accountant unwilling to rely
on management's representations, or unwilling to be
associated with the financial statements prepared by
management; or
(iii) the scope of the audit should be expanded significantly,
or information had come to the accountant's attention
that the accountant had concluded would, or if further
investigated might, materially impact the fairness or
reliability of a previously issued audit report or the
underlying financial statements, or the financial
statements issued or to be issued covering the fiscal
period(s)subsequent to the date of the most recent
audited financial statements (including information
that might preclude the issuance of an unqualified audit
report), and the issue was not resolved to the
accountant's satisfaction prior to its resignation or
dismissal.
The decision to change accountants was approved by the Registrant's board
of directors on July 1, 1999. The Registrant's new auditors are expected to be
Daszkal, Bolton & Manela, P.A., certified public accountants with offices at 240
West Palmetto Park Road, Suite 300; Boca Raton, Florida 33432, who currently
serve as American Internet's auditors. Their telephone number is (561) 367-1040;
their fax number is (561) 750-3236; and, their Internet web site is located at
www.dbmsys.usa.com. The proposed auditor's engagement agreement is filed as an
exhibit to this report (see "Item 7[c], Exhibit Index").
14
Administrative Offices
The Yankee Companies, Inc.
A Florida corporation
- - --------------------------
Leonard Miles Tucker
President & Chief Executive Officer
William A. Calvo, III, Ll.M.
Vice President & Treasurer
Boca Raton Office
902 Clint Moore Road, Suite 136
Boca Raton, Florida 33487
Telephone (561) 998-2025
Fax Number (561) 998-3425
E-Mail [email protected]
Please respond to Ocala address
Ocala Office
1941 Southeast 51st Terrace
Ocala, Florida 34471
Telephone (352) 694-9182
Service (352) 368-6525
Mobile Number (352) 895-0452
Fax Number (352) 694-9178
E-Mail [email protected]
August 9, 1999
Mr. Richard Chamberlin, Esq.
Chamberlin Law Office, P.A.
1941 Southeast 51st Terrace, Suite 800
Ocala, Florida 34471
Dear Mr. Chamberlin,
Please find attached Equity Growth Systems, inc., ("Equity"), check number
1070 made payable to Bowman and Bowman CPA's in the amount of $1,500.00 as final
payment. The check is dated July 15, 1999 and appears to be deposited in the
bank account of Bowman and Bowman, P.A., on or about July 21, 1999.
As, President of the Yankee Companies, Inc. (Yankees"), Equity's strategic
consultant charged with the responsibility for negotiation and payment of
liabilities, I was called by Mr. Bowman at approximately 5:45 P.M. on Friday
July 9, 1999, and I returned the phone call on Monday, July 12, 1999. At that
time Mr. Bowman informed me that he had been advised that he was not going to be
used as Equity's auditor for the 1999 audit by Penny Field. Mr. Bowman asked
Yankees, on behalf of Equity, to send his final payment for his completed audit
and on July 15, 1999, I sent him his final payment.
Very truly yours,
The Yankee Companies, Inc.
Leonard M. Tucker
President
Exhibit A Copy of the check sent and endorsed by Bowman and Bowman
EQUITY GROWTH SYSTEMS INC 1070
Date 7/15/99
Pay to
the order of Bowman and Bowman CPAs $1500.00
One Thousand Five Hundred & 00/100 Dollars
First Union National Bank
ForFinal Payment Thank you /s/ Leonard Tucker
The back of the check shows the check was deposited into the account of Bowman
& Bowman P.A. CPA's
15
