United States Securities and Exchange Commission
Washington, D.C. 20549
AMENDED 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): Subsequent of June 9, 1997
Amended as of August 5, 1997
ENVIRONMENTAL CHEMICALS GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C> <C>
Delaware 33-18315-A 65-0035784
(State or Other Jurisdiction of Incorporation) (Commission File Number) (I.R.S. Employer Identification No.)
</TABLE>
P.O. Box 1277, Andrews, Texas 79714
(Address of Principle Executive Offices) (Zip Code)
Registrants telephone number, including area code: (915) 524-6232
Former Name or Former Address, If Changed Since Last Report: Not Applicable
Report on Form 8-K, August 5, 1997 Page 1
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Item 4. Changes in Registrant's Certifying Accountant.
(i) On June 4, 1997, the Company received notice that its former
independent accountant, S.W. Hatfield + Associates, resigned as
independent accountants from the Company by way of the attached
letter of resignation (Exhibit A).
(ii) The former accountants are fully aware of the problems and
indebtedness created by the Company's former management and the
injunction filed against the Company by the S.E.C. as a result of
prior management's activities. By receipt of letter dated June
19, 1997 (Exhibit C), S.W. Hatfield + Associates have restated
their position, as the former accountant, and their inability to
remain independent, as required by the S.E.C., due to the
aforementioned indebtedness.
(iii)The resignation of the former accountant was not approved by the
Board of Directors. Due to the Company's lack of cash flow,
reinstatement of former accountant is not anticipated.
(iv) In connection with the audits of the Company's financial
statements for the two most recent fiscal year, there were no
disagreements with the former accountant on any matter of
accounting principle or practices, financial statement
disclosures, or auditing scope or procedure. During the
subsequent interim period up to May 27, 1997, there were no
disagreements with the former accountant on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure.
(v) As described in the accountant's June 19, 1997 letter (Exhibit
C), the former accountants concerns rest upon indebtedness of the
Company, to the accountants, resultant of management practices by
the previous directors of the Company. The current directors of
the Company no longer view this resignation as a hostile action
toward the Company, but rather as an unfortunate situation
resultant of the practices employed by the previous management.
(vi) S. W. Hatfield + Associates'report on the Company's financial
statements for the fiscal year ended December 31, 1995 did not
contain an adverse opinion or disclaimer of opinion and was not
qualified as to uncertainty, audit scope or accounting principles
except for the going concern referred to in their opinion. (See
Exhibit B)
The audit report of Akin, Doherty, Klein & Feuge, P.C. on the
Company's financial statements for the fiscal year ended December
31, 1994, did not contain an adverse opinion or disclaimer of
opinion and was not qualified as to uncertainty, audit scope or
accounting principles except for the going concerns referred to
in their opinion. (See Exhibit B)
Report on Form 8-K, August 5, 1997 Page 2
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Item 5. Other Events.
(i) During the fourth quarter of 1996, the National Bank of Andrews
and Taser, L.L.C. withdrew financing. Due to lack of cash flow
and pending litigation, the Company's assets were foreclosed upon
and liquidated. This action was completed in December of 1996.
Item 7. Financial Statements and Exhibits.
Exhibit A: Former accountant's letter of resignation.
Exhibit B: Pg 1 - Independent Auditor's Report for
1993 and 1994
Akin, Doherty, Klein & Feuge, P.C.
Pg 2 - Report of Independent Certified Public
Accountants for 1995
S. W. Hatfield + Associates
Exhibit C: Former accountant's letter of June 19, 1997.
Exhibit 16.1: Former accountant's confirming letter.
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.
Registrant: Environmental Chemicals Group, Inc. August 5, 1997
- ---------------------------------- -------------------------
Dan W. Snow Billy Smartt
Chief Executive Officer / Director President / Director
Report on Form 8-K, August 5, 1997 Page 3
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EXHIBIT A
[Letterhead of S.W. Hatfield + Associates]
certified public accountants
May 27, 1997
Board of Directors
ENVIRONMENTAL CHEMICALS GROUP, INC.
P.O. Box 1277
Andrews, TX 79714-1277
Gentlemen:
Please be advised that Environmental Chemicals Group, Inc. (Company) currently
has amounts owed S.W. Hatfield + Associates (Firm) which are in excess of one
(1) year old. Your unwillingness to professionally conduct your business affairs
has created a situation whereby this Firm is no longer independent with respect
to your Company and the Company's financial statements.
Accordingly, we hereby resign as the Company's independent certified public
accountants and will refer these amounts due for collection.
Additionally, this is to confirm that the client-auditor relationship between
Environmental Chemicals Group, Inc. and S.W. Hatfield + Associates has ceased.
Sincerely,
/s/ S.W. Hatfield + Associates
- ------------------------------
S.W. Hatfield + Associates
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, NW
Washington, DC 20549
<PAGE>
EXHIBIT B - PG 1
Independent Auditor's Report
To The Board of Directors and Shareholders
Environmental Chemicals Group, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Environmental
Chemicals Group, Inc. and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of operations, changes in shareholders' equity
and cash flows for the years then ended. Our audits also included the financial
statements schedules listed in the Index on page F-2. These financial statements
and schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Environmental Chemicals Group, Inc. and Subsidiaries at December 31, 1994 and
1993, and the consolidated results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
also, in our opinion, the related financial statement schedules, when considered
in relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred net losses of $863,673, $135,470 and $98,129 during each
year in the three year period ended December 31, 1994, and as of that date, the
Company's current liabilities exceeded its current assets, less prepaid expenses
and deposits, by $174,825. These factors, among others as discussed in Note B to
the financial statements, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note B. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Akin, Doherty, Klein & Feuge
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Akin, Doherty, Klein & Feuge, P.C.
San Antonio, Texas
March 24, 1995
<PAGE>
EXHIBIT B-PG 2
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors and Shareholders
Environmental Chemicals Group, Inc.
We have audited the accompanying consolidated balance sheet of Environmental
Chemicals Group, Inc. (a Delaware corporation) and Subsidiaries as of December
31, 1995 and the related consolidated statements of operations, changes in
shareholder's equity and cash flows for the year then ended. these consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
The consolidated financial statements as of and for the respective years ended
December 31, 1994 and 1993 were audited by other auditors and they expressed a
qualified opinion related to going concern issues, as discussed below and in
Note C to the accompanying consolidated financial statements, in their report
dated March 24, 1995. The other auditors have not performed any auditing
procedures since March 24, 1995.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test bases, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Environmental Chemicals Group, Inc. and Subsidiaries as of December 31, 1995,
and the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles. Also, in our opinion,
the accompanying consolidated financial statement schedules, as required by
Regulation S-X of the U.S. Securities and Exchange Commission, when considered
in relation to the basic consolidated financial statements, taken as a whole,
present fairly in all material respects the information set forth therein.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note C., the
Company has recurring net operating losses and has used net cash in operations
over the previous three years. These factors, among other, raise substantial
doubt about the Company's ability to continue as a going concern. The
consolidated financial statements do not include any adjustments relating to the
recoverability and classifications of recorded asset and liability amounts that
might result from the outcome of this uncertainty.
/s/ SW Hatfield + Associates
----------------------------
S.W. HATFIELD + ASSOCIATED
Dallas, Texas
March 27, 1996 (except for Noe D
as to which the date is April 2, 1996
<PAGE>
EXHIBIT C
[Letterhead of S.W. HATFIELD + ASSOCIATES]
June 19, 1997
Board of Directors
ENVIRONMENTAL CHEMICALS GROUP, INC.
P.O. Box 1277
Andrews TX 79714-1277
Gentlemen:
On June 14, 1997, this Firm received a copy of the Form 8-K filed by
Environmental Chemicals Group, Inc. (Company) on or about June 9, 2997.
The Firm has the following commentary related to the Company's comments in Item
4. of the filing:
The Rules of the U.S. Securities and Exchange Commission as set forth in the
Codification of Financial Reporting Policies, Section 602.02.b.b. state "If fees
for audit and other professional services are owned to an accountant for an
extended period of time and become material in relation to the fee expected to
be charged for a current audit, there may appear to have a direct interest in
the results of operations of the client." We consider the unpaid fees for the
December 31, 1995 audit to be material to the anticipated fees related to an
audit of the Company's financial statements as of and for the year ended
December 31, 1996.
Under these circumstances, we believe that we had no other alternative other
than to resign as the Company's independent accountants.
Sincerely,
S.W. HATFIELD + ASSOCIATES
/s/ Scott W. Hatfield
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Scott W. Hatfield, CPA
For the Firm
SWH/
cc: U.S. Securities and Exchange Commission
<PAGE>
EXHIBIT 16.1
[Letterhead of
S.W. Hatfield + Associates
certified public accounts]
August 13, 1997
U.S. Securities and Exchange Commission
450 Fifth Street, NW
Washington DC 20549
Gentlemen:
On August 6, 1997, this Firm received a proposed copy of the Form 8-K/A to be
filed by Environmental Chemicals Group, Inc. (Company) during August 1997.
We have no disagreements with the statements made within the proposed Form 8-K/A
and continue to refer readers to our letters of May 27, 1997 and June 19, 1997.
Sincerely,
/s/ SW Hatfield & Associates
- -----------------------------
S.W. HATFIELD+ASSOCIATES
SWH/
cc: Board of Directors
ENVIRONMENTAL CHEMICALS GROUP, INC.
P.O. Box 1277
Andrews, TX 79714-1277
