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): June 21, 1996
ADEN ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
California 00-18140 87-0447215
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or File No.) Identification No.)
organization
260 Regency Parkway, Suite 220, Omaha, Nebraska 68114
(Address of principal executive offices) (Zip Code)
(402) 343-0191
(Registrant's telephone number, including area code)
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Item 4. Changes in Registrant's Certifying Accountant
On June 6, 1996, Aden Enterprises, Inc., (the" Registrant") was
informed by its independent auditor, Darrell Schvaneveldt and Company
("Schvanveldt") of its resignation as the Registrant's independent auditor as
of that date. Schvaneveldt resigned as the the Registrant's independent
auditor after peer review by the AICPA raised questions regarding
Schvanveldt's independence. The AICPA sent the issue to the Securities
and Exchange Commission ("SEC") who after review determined that
Schvanveldt was, in fact, not independent.
In the opinion of management of the Registrant, the financial statements
contained in the Company's report on Form 10-K for the period ended April
30, 1995, appropriately reflect all business transactions and all adjustments
necessary for a fair presentation of the financial position and the results of
operations of the Company for the periods presented.
In the past two fiscal years and the subsequent interim period Schvaneveldt
and the Company have had no disagreements on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure or any reportable events.
The reports of Schvaneveldt on the financial statements of the the Registrant
for each of the two fiscal years in the period ended April 30, 1995 did not
contain any adverse opinion or disclaimer of opinion and were not qualified
or modified as to uncertainty, audit scope or accounting principles.
The Registrant has requested that Schvaneveldt furnish it with a letter
addressed to the SEC stating whether it agrees with the above statements
made by the Registrant in response to this item 4 and, if it does not, stating
the respects in which it does not agree. The Registrant delivered a copy of
Form 8-K report to Schvanveldt on June 21, 1996. The Registrant will file
by amendment, as an exhibit to this Form 8-K report, a copy of such letter
when it is received.
Item 5. Other Information
In December 1995, the Registrant announced it had acquired the assets of
Safe Pay, Inc. ("Safe Pay") through a wholly owned subsidiary, Safe Pay
Acquisition Corporation. After further exploration into the electronic
commerce industry, the Registrant has decided to discontinue its efforts to
establish itself in this industry. Pursuant to this decision, the Safe Pay
acquisition has been recinded. The Registrant will instead focus all its
efforts into the telecommunications and internet service provider industries.
The Registrant acknowledges the possibility that Safe Pay may bring suit
against the Registrant to recover any damages it may have incurred.
In August 1995, the Registrant signed a letter of intent with ITSI, Inc.,
("ITSI") to merge with it and thereby acquire its wholly owned, operating
subsidiary company SmartPay Processing, Inc. ("SmartPay"). The
Registrant expected to utilize the services and expertise in the electronic
commerce industry, to this end the Registrant made various loans to
ITSI/SmartPay totaling approximately $1,800,000. The Registrant was
recently informed that SmartPay has since ceased operations and can longer
provide the Registrant with the services and expertise it sought, thus the
Registrant perceives no good business reason to pursue the merger. The
Registrant will do everything reasonably possible to recover some or all
of the amount loaned to ITSI, although the Registrant believes that recovery
of any or all of the loaned funds is unlikely.
The Registrant purchased an option to acquire all of the assets and business
of Telenational Communications Limited Partnership, a limited partnership
organized under the laws of the state of Nebraska ("Telenational"). The
Registrant paid $150,000 for the option, which has expired with no value.
The Registrant borrowed $1,000,000 from an investor for the purpose of the
Telenational transaction. Of the $1,000,000, $850,000 was loaned to
Telenational and $150,000 was paid for the option to acquire Telenational.
The $850,000 note is due on November 8, 1996, and there is no assurance any
of the $850,000 will be repaid.
The Registrant acquired several promissory notes from Capstone Group of
The Technology Group, a privately-held Maryland corporation, located in
Baltimore, Maryland ("TTG"). These promissory notes, combined with
additional advances and accrued interest totaled approximately $340,000 in
July 1995. These notes, which were due on December 1, 1995, are all in
default and there is no assurance these notes will be repaid.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Aden Enterprises, Inc.
By: Michael S. Luther
Michael S. Luther, President
Date: June 21, 1996
