SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
FILED PURSUANT TO SECTION 12., 13. OR 15(d)
TREASURES & EXHIBITS INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its Current Report dated January 25,
1999 on Form 8-K and filed March 5, 1999 as set forth in the pages attached
hereto;
(List all such items, financial statements,
exhibits or other portions amended)
This Amendment to the Current Report on Form 8-K dated January 25, 1999 adds:
Item 7. Financial Statements and Exhibits to file a Reg. S-K, Item 601(b)(16)
letter regarding Change in Certifying Accountant reflecting the former
principal accountant's agreement with statements of the Registrant made in the
current report concerning termination of the Registrant's principal accountant
as requested by Reg. S-K, Item 304(a)(3).
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
TREASURES & EXHIBITS INTERNATIONAL, INC.
March 24, 1999 BY:/s/Lee C. Summers
Lee C. Summers, CEO
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
JANUARY 25, 1999
Date of Report (Date of Earliest Event Reported)
2-96366-A
(Commission File Number)
TREASURE & EXHIBITS INTERNATIONAL, INC.
Florida 59-2483405
(State or Other Juris- (IRS Employer Iden-
diction of Incorporation) tification Number)
2300 Glades Road, Suite 450-West
Boca Raton, Florida 33431
(Address of Principal Executive Offices)
(561) 750-7200
(Registrant's Telephone Number)
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Item 4. Changes in Registrant's Certifying Accountant
(a)(1)(i) On January 25, 1999, the Registrant terminated its relationship
with Thomas W. Klash, C.P.A. by dismissal. Mr. Klash is a sole practitioner
previously engaged as the principal accountant to audit the Company's
financial statements. The Company had not entered into an engagement agreement
with Mr. Klash for the audit of its financial statements for the fiscal year
ended December 31,1998 at the time of dismissal.
(ii) Neither of the auditor's reports on the Company's financial
statements for the fiscal years ended December 31,1997 and December 31,1996
contained an adverse opinion or a disclaimer, or was qualified or modified as
to uncertainty, audit scope or accounting principles.
(iii) The Company's decision to change accountants was approved by
the Registrant's Board of Directors on January 26,1999.
(iv) During the latter half of 1998, the interim period preceding
dismissal, there were increasing tensions over disagreements with the former
accountant regarding his on-going stated need for certain documentation
relating to various Company transactions in connection with preparation for
the audit for the fiscal year ended December 31, 1998. The Company disagreed
generally with the stated need and was faced with substantial difficulty and
burdensome expense to secure the documents and to satisfy the demands which
went somewhat unresolved at December 31, 1998. Mr. Klash advised the
Registrant that such needs if not resolved to his satisfaction would cause
reference to the subject matter of the disagreements in connection with the
auditor's report for the fiscal year ended December 31,1998.
In addition to the disagreements regarding transactional matters,
the former accountant expressed concern with the Company's non-payment of the
former auditor's outstanding billing for work undertaken on behalf of the
Registrant to determine whether the financial records of its former
acquisition target, Michael's Treasure Jewelry International, Inc., were in
fact auditable. During 1998, the former accountant concluded that they were
not. Based upon that determination, after months of intense effort, the
Registrant abandoned the planned acquisition as infeasible due to the reported
inability of audit of the target's books and records of its operations.
By mid-January, 1999, the increasing strain between management and
the former accountant over what the Company viewed as unreasonable and
unnecessary document demands and excessive pressure for payment of billing
resulted in its decision to dismiss Thomas W. Klash as the Company's auditor.
The Company had come to view its former accountant as too limited as a sole
practitioner and determined to seek and secure a larger firm to engage for the
audit of its financial statements for the fiscal year ended December 31,1998.
(A) The Company had acquired a certain lot of treasure artifacts
from Seahawk Deep Ocean Technology during the first quarter of
1998 and proposed to carriage of the artifacts as substantial
assets on its balance sheet following completion of the
purchase transaction. During the balance of 1998, the former
accountant advised the Company that, at minimum, audit of its
financial statements would necessitate external valuation
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documentation such as detailed, certified appraisals of all of
the artifacts comprising the purchased lot. The Company
proposed reliance upon various materials and statements of the
Seller in lieu of undertaking the burden of seeking and paying
for the evaluations required by the former accountant. The
former accountant disagreed and pressed his viewpoint with
increasing frequency.
When the artifacts were sold near the end of the fiscal year
for debt of the new buyer, the former accountant indicated a
consequent need for documentation and information
demonstrating the fiscal condition of the new buyer in order
to agree with the Registrant's proposal that the debt resulting
from the sale of the artifacts be carried as an asset on the
Company's balance sheet. Once again, the Company disagreed with
that stated need and the requirement was unsatisfied at the
time of the dismissal.
The Company also disagreed with various other needs stated by
its former accountant. A gambling casino sea-going vessel was
acquired through lease-purchase in the fourth quarter of 1998.
The former accountant again required valuation documentation
for the lease-purchase and suggested that the Company secure a
competent legal opinion regarding the details of the proposed
gambling operations. The Company disagreed. The former
accountant stated a necessity to carry a certain put option
obligation arising from the artifacts purchase transaction as
a significant liability pursuant to the purchase agreement.
The Company viewed the puts in question as extinguished. The
former accountant insisted that the Company secure waivers
from the put holders in the absence of which, the put
obligations of the Company would require a corresponding,
substantial liability on its 1998 statements. The Company
disagreed.
The former accountant requested payment of his outstanding
billing with increasing frequency at year end and prior to
dismissal and proposed such payment prior to engagement for
the 1998 audit to, among other things, preserve the former
accountant's independence in the engagement under discussion.
The Company did not tender payment to its former accountant
prior to dismissal and viewed the former accountant's position
in the matter as undue pressure upon the Company.
(B) In the absence of an audit or similar committee of the Board
of Directors, the Company's sole director frequently discussed
the subject matter of each of such disagreements with the
former accountant.
(C) The Registrant has authorized the former accountant to respond
fully to inquiries of the successor accountant concerning the
subject matter of each such disagreement, without limitation.
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(v) (A) During 1998, the former accountant generally advised the
Registrant that internal controls necessary for the Company to
develop reliable financial statements were somewhat deficient.
The Registrant did not disagree and generally proceeded with
implementation of suggested needed improvements.
(B) During 1998, the former accountant advised the Registrant
that the lack of reliable valuation materials on the artifacts
would cause the former accountant to be unwilling to be
associated with the interim financials prepared by management.
(C) (1) The former accountant advised the Registrant that
further investigation of valuation of the artifacts may
have materially affected the fairness or reliability of
interim financial statements issued by management since
the last audit.
(2) No such further investigation was undertaken prior
to dismissal.
(D) (1) The former accountant advised the Registrant that the
valuation situation and lack of documentation of the
re-sale buyer would likely prevent an unqualified
report on the financial statements since the last
audited report.
(2) Those issues were not resolved prior to the dismissal.
(2) On February 20, 1999, the Registrant engaged a new independent
accountant as the principal accountant to audit the Company's financial
statements, Rachlin, Cohen & Holtz, CPA, located in Ft. Lauderdale, Florida.
Prior to engaging that accountant, neither the Registrant, nor
anyone on its behalf, consulted the newly engaged accountant regarding either:
(i) the application of accounting principles to specific
transactions or the type of audit opinion that might be
rendered on the Registrant's financial statements; or
(ii) any matter that was the subject of a disagreement with the
former accountant or any reportable event.
(3) The Registrant has requested the former accountant to furnish the
Registrant with a letter addressed to the Commission stating whether the
former accountant agrees with the statements made by the Company in this
Current Report on Form 8-K.
(b) Not applicable.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibits:
(b)(10) Letter regarding Change in Certifying Accountant dated March
19, 1999 (received by Registrant March 23, 1999)
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TREASURE & EXHIBITS INTERNATIONAL , INC.
Dated: March 24, 1999
BY:/s/Lee Summers
Lee Summers, CEO
THOMAS W. KLASH
Certified Public Accountant
March 19, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: VANDERBILT SQUARE CORP.
FILE REF. NO. 2-96366-A
Dear Sir or Madame:
I was previously the principal accountant for Vanderbilt Square
Corp. and, under the date of February 8, 1998, I reported on the
consolidated financial statements of Vanderbilt Square Corp. and
subsidiaries as of and for the years ended December 31, 1997 and
1996. On January 25, 1999, my appointment as principal accountant
was terminated. I have read Vanderbilt Square Corp.'s statements
included under Item 4 of its Form 8-K dated March 5, 1999 and I
agree with such statements.
Very truly yours,
/s/Thomas W. Klash
Thomas W. Klash
2404 Hollywood Boulevard, Hollywood, Florida 33020 (954) 925-4900
