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 of earliest event reported) November 20, 1998
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ILX Resorts Incorporated
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(Exact Name of Registrant as Specified in its Charter)
Arizona 001-13855 86-054171
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
2111 East Highland Avenue, Suite 210, Phoenix, Arizona 85016
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (602) 957-2777
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ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
On November 20, 1998, Deloitte & Touche LLP ("D&T") resigned as the
principal independent accountants for ILX Resorts Incorporated (the "Company").
D&T delivered its resignation at a meeting held with the Audit Committee of the
Company's Board of Directors. Prior to such meeting, the Audit Committee had
determined to terminate D&T as a result of issues relating to the Company's
evaluation of the quality of service provided by D&T.
D&T advised the Audit Committee that it was resigning due to a disagreement
over the proper treatment of the extinguishment by the Company of certain debt.
In September 1998, the Company prepaid a promissory note to an affiliated party
in exchange for the forgiveness of $200,000 of the principal amount of such
note. This transaction was reflected as approximately $200,000 of income in the
Company's income statement for the fiscal quarter ended September 30, 1998. The
nature of this transaction was also disclosed in Note 3 to the Company's
financial statements for such period. D&T indicated that its view was that,
because this transaction was with a related party, it should have been treated
as a capital transaction under APB 26. The Company believes that its treatment
of this extinguishment of debt is consistent with Paragraph 20 of APB 26.
Neither of D&T's reports on the Company's financial statements for the last
two years contained an adverse opinion or a disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.
In addition, during such periods and the period from December 31, 1997 until the
date of D&T's resignation, except for the disagreement discussed in the
preceding paragraph, there were no disagreements or "reportable events", as
contemplated by Item 304(a)(1) (iv) and (v), respectively, under Regulation S-K.
The Company has provided D&T with a copy of the foregoing disclosure, and
has requested that D&T furnish it with a letter addressed to the Securities and
Exchange Commission stating whether or not it agrees with such disclosure. The
Company will file a copy of such letter by an amendment to this Report on Form
8-K promptly following its receipt from D&T.
The Company has not yet engaged a new independent accounting firm to audit
its financial statements. However, the Company will authorize D&T to respond
fully to the inquiries of the successor accountant concerning the subject mater
of the disagreement discussed above.
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SIGNATURES
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.
ILX RESORTS INCORPORATED
By: /s/ Joseph P. Martori
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Joseph P. Martori
Chief Executive Officer
Date: November 30, 1998
