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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date earliest event reported) July 12, 1996
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VALUE HOLDINGS, INC.
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(exact name of registrant as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation)
0-15076 59-2388734
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(Commission File Number) (IRS Employer Identification Number)
3211 PONCE DE LEON BLVD., CORAL GABLES, FL 33134
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (305) 666-3165
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N/A
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(Former name or former address, if changed since last report)
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Item 4. Changes in Registrant's Certifying Accountant.
On July 12, 1996, Value Holdings, Inc. (the "Company")
received a letter from its former auditors, Rachlin, Cohen & Holtz, responding
to the Company's prior Current Report on Form 8-K reporting that firm's
resignation as the Compnay's auditors. A copy of the letter is attached as
Exhibit 1.
Item 7. Financial Statements and Exhibits.
Exhibit 1. Letter from Rachlin, Cohen & Holtz to the Company
dated July 12, 1996, with attached letter from Rachlin, Cohen & Holtz addressed
to the Securities and Exchange Commission dated July 12, 1996.
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.
VALUE HOLDINGS, INC,
By /s/ Anthony Pallante
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Anthony Pallante
President
Date: July 15, 1996
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[RACHLIN COHEN & HOLTZ LETTERHEAD]
July 12, 1996
Mr. Anthony M. Pallante
President
Value Holdings, Inc.
3211 Ponce de Leon Boulevard, Suite 210
Coral Gables, Florida 33134
Dear Mr. Pallante:
Enclosed is our response to the items contained in Item 4 of Form 8-K which is
addressed to the Securities and Exchange Commission.
I would appreciate it if you could send me a copy of the completed Form 8-K as
filed, together with all Exhibits.
Sincerely,
/s/ MORRIS I. HOLLANDER
Morris I. Hollander, CPA
Enclosure
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[RACHLIN COHEN & HOLTZ LETTERHEAD]
July 12, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: VALUE HOLDINGS, INC.
COMMISSION NO. 0-15076
Gentlemen:
This letter is furnished in response to the comments contained in Item 4 of
Form 8-K of Value Holdings, Inc. (the "Registrant") dated July 9, 1996.
We are not in agreement with certain of the Registrant's disclosures regarding
our resignation and certain reportable events. Specifically in response to
Item 4, the Registrant states, in relevant part, as follows:
The company does not agree with the assertions of the former auditors
and it is at a loss to understand the reasons for the resignation.
To the best of management's knowledge, all the information requested
by the auditors for the completion of the audit had been provided and
there had been no indication that there were any unresolved
discrepancies.
At the time of the firm's resignation, there were numerous requests for
information, documentation and substantiation of transactions necessary to
complete the audit, but these had not been satisfactorily provided. There were
a number of significant unresolved issues and discrepancies. Multiple
deficiencies were pointed out to the Registrant in a series of commuications
during the month of June and the first few days of July.
The internal control environment at the company deteriorated materially from
the prior fiscal year to the current fiscal year. The inadequacy of internal
controls and the inadequate control environment was compounded by a lack of
awareness or lack of understanding by the chief financial officer of the
details of significant transactions engaged in by the Registrant.
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[RACHLIN COHEN AND HOLTZ LETTERHEAD]
Securities and Exchange Commission
July 12, 1996
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Because of the lack of internal controls, the lack of source documentation, the
existence of at least one material unrecorded transaction, and the inability of
the Registrant's president and chief financial officer to explain,
substantiate, or justify the business purpose for significant corporate
transactions, we believed that we could no longer place reliance on
management's representations.
Specific matters of disagreement (both resolved and unresolved) included: (1)
significant related party transactions at year end; (2) a client adjustment at
year end to record a previously unrecorded transaction with an affiliate after
we had proposed an adverse audit adjustment pertaining to this transaction; (3)
the valuation of common stock to be issued to the president of the Registrant
in connection with the Registrant's investment in a Canadian subsidiary and the
manner of accounting for this minority interest; (4) a proposed adjustment to
write off to expense certain management fees that arose from the issuance of
common stock, which the Registrant had capitalized; and (5) a proposed
adjustment to record accrued penalties and interest on unpaid payroll and sales
taxes.
In addition, in our review of the Registrant's responses to Item 4, we noted
that the Registrant did not report any matters with respect to the issuance of
modified audit reports on the two prior years' financial statements of Value
Holdings, Inc and subsidiaries. With regard to the reports on the financial
statements of the Registrant for the years ended February 28, 1995 and 1994,
the report dated June 6, 1995 contains an explanatory paragraph referring to
significant uncertainties as to the Company's ability to continue as a going
concern and certain pending litigation as to which an estimate of the
likelihood of an unfavorable result could not be made.
Very truly yours,
/s/ RACHLIN COHEN & HOLTZ
Rachlin Cohen & Holtz
