SECURITIES AND EXHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OF 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
ILX Resorts Incorporated, an Arizona corporation ("ILX"), is filing
this Amendment No. 1 to its Current Report on Form 8-K, dated November 20, 1998
(the "Form 8-K"), in order to file as an exhibit a letter from Deloitte & Touche
LLP ("D&T") to the U.S. Securities and Exchange Commission. Pursuant to Item
304(a)(3) of Regulation S-K, D&T has provided such letter for the purposes of
stating whether or not it disagrees with the statements made by ILX in the Form
8-K. A copy of D&T's letter is filed herewith.
ILX disagrees with that portion of the fourth sentence of the fourth
paragraph of D&T's letter which states that D&T advised ILX's Chief Financial
Officer, its Chairman and Chief Executive Officer, its President, and one of the
two members of its Audit Committee, that "D&T believed the 9/30/98 Financial
Statements were misstated". At no time during the course of D&T's discussions
with such officers and director of ILX did D&T state that ILX's treatment of the
transaction constituted a misstatement, rather D&T stated that it was a
disagreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
None
(b) Pro Forma Financial Information
None
(c) Exhibits
16 Letter, dated December 8, 1998, from Deloitte & Touche LLP to the
U.S. Securities and Exchange Commission
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EXHIBITS
NO. DESCRIPTION METHOD OF FILING
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16 Letter, dated December 8, 1998, from Filed Herewith
Deloitte & Touche LLP to the U.S.
Securities and Exchange Commission
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment No. 1 to its report on Form 8-K 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: December 11, 1998
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EXHIBIT 16
{DELOITTE & TOUCHE LLP LETTERHEAD]
December 8, 1998
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read Item 4 of Form 8-K of ILX Resorts Incorporated (the "Company")
dated November 20, 1998 and have the following comments.
We agree with the comments in the first and second sentences of the first
paragraph, the third paragraph and the first sentence of the fourth paragraph.
We have no basis to agree or disagree with the comments in the third sentence of
the first paragraph, the second sentence of the fourth paragraph and the fifth
paragraph.
With respect to the disagreement between the Company and Deloitte & Touche
("D&T") and related matters discussed in the second paragraph, on November 20,
1998, we advised the Audit Committee of the Board of Directors of the Company
(the "Audit Committee") of the following.
On September 29, 1998, the Company entered into an agreement to prepay a
promissory note payable to Martori Enterprises Incorporated ("MEI") in exchange
for the forgiveness of $200,000 of the principal amount of the note. MEI is a
related party which owns approximately 22 percent of the Company's outstanding
common stock and whose Chairman of the Board of Directors (Joseph P. Martori) is
also the Chairman of the Company's Board of Directors and the Company's Chief
Executive Officer. On November 11, 1998, D&T received from the Company a draft
of the Company's consolidated financial statements as of and for the three and
nine months ended September 30, 1998 (the "9/30/98 Financial Statements"), which
recorded the $200,000 debt forgiveness as interest income. Over the period of
November 12 and 13, 1998, and prior to the Company filing its Form 10-Q for the
quarter ended September 30, 1998 (the "9/30/98 Form 10-Q"), D&T advised the
Company's Chief Financial Officer, its Chairman and Chief Executive Officer, its
President, and one of the two members of its Audit Committee, that: (i) because
of the nature of the related party transaction, D&T believed that the $200,000
debt forgiveness should be recorded as a credit to additional paid-in capital;
and (ii) because the 9/30/98 Financial Statements included the $200,000 debt
forgiveness as interest income, D&T believed the 9/30/98 Financial Statements
were misstated, and that those financial statements needed to be adjusted prior
to the Company's filing its Form 10-Q. Certain of this information, including
the existence of a disagreement between D&T and the Company's management, was
discussed with the second member of the Audit Committee prior to the Company's
filing the 9/30/98 Form 10-Q. The Company disagreed with D&T's conclusion
regarding the accounting treatment for the debt forgiveness and, on November 13,
1998, filed the 9/30/98 Form 10-Q containing the 9/30/98 Financial Statements
without making the adjustment proposed by D&T (as discussed above) to the
financial statements for the $200,000 debt forgiveness.
Yours Truly,
/s/ Deloitte & Touche
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