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
April 21, 1997
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Date of Report (date of earliest event reported)
MEDNET, MPC CORPORATION
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(Exact name of Registrant as specified in its charter)
Nevada 0-17120 88-0215949
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(State or other (Commission File (IRS Employer
jurisdiction of Number)
Identification
Incorporation) Number)
871-C Grier Drive
Las Vegas, Nevada 89119
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(Address of principal executive offices)
702-361-3119
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(Registrant's telephone number, including area code)
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Item 4. Changes in Registrant's Certifying Accountant
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McGladrey & Pullen, LLP ("McGladrey"), the Company's independent
auditors, notified the Company on April 14, 1997, of their resignation as
auditors effective immediately. McGladrey stated that their resignation is the
result of (i) the Company's inability to provide McGladrey with adequate
documentation evidencing the occurence and legal enforceability of a purported
warrant extension transaction (Jann Warrant Extension) that was recorded in the
first quarter of 1996, (ii) their conclusion that they were no longer able to
rely on management's representations, and (iii) significant unresolved
accounting matters relating to the Company's financial statements as of and for
the year ended December 31, 1996, including disclosure and accrual of litigation
loss contingencies. McGladrey had been retained to audit the Company's financial
statements for the year ended December 31, 1996, but had not issued a report on
such financial statements at the time of its resignation.
McGladrey's audit report on the financial statements for the years
ended December 31, 1994 and 1995 did not contain an adverse opinion or
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope, or accounting principles.
2
<PAGE>
During the Company's two most recent fiscal years and the interim
period preceding McGladrey's resignation, the Company and McGladrey had
"disagreements" (as such term is used in Regulation S-K, Item 304) regarding the
following matters:
A. The accounting treatment in the first quarter of 1996 for the
extension of certain warrants originally issued to consultants in 1991, the Jann
Warrant Extension;
B. The adequacy of the reserve for bad debt at December 31, 1996;
C. The need for certain litigation-related accruals and disclosures;
and
D. The need to restate the first, second, and third quarters of 1996
as a result of the significant adjustments in the fourth quarter of 1996.
The Company's audit committee discussed each of the disagreements
described above with McGladrey.
The Company had determined to increase its reserve for bad debts,
increase its litigation-related accruals, and to restate the first, second, and
third quarter of 1996.
The Company has provided McGladrey with a copy of this report prior to
filing this report with the Securities and Exchange Commission. The Registrant
has received from McGladrey a letter addressed to the Securities and Exchange
Commission stating it agrees with the statements made in this report. The letter
is filed as an exhibit to this report.
Pursuant to Regulation S-K, Item 304 (A)(1)(iv)(C) the Company has
instructed McGladrey & Pullen to respond fully to inquiries of successor
accountants.
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.
MEDNET, MPC CORPORATION
Dated: April 21, 1997 By /s/ Robert Bagdasarian
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Name: Robert Bagdasarian
Title: Chief Executive
Officer
3
McGladrey & Pullen, LLP RSM
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Certified Public Accountants and Consultants international
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
We were previously the independent accountants for Mednet MPC Corporation
(Mednet), and on March 8, 1996 (except for Note 6 as to which the date is March
27, 1996), we reported on the financial statements of Mednet as of and for the
two years ended December 31, 1995. On April 14, 1997, we resigned as independent
accountants of Mednet. We have read Mednet's statements included under Item 4 of
its Form 8-K dated April 18, 1997.
With regard to the first through the fourth paragraphs and the sixth paragraph
included under Item 4 of Mednet's Form 8-K dated April 18, 1997, we agree with
the comments therein. With regard to the fifth paragraph of Item 4, we have no
basis to agree or disagree with the comment.
/s/ McGladrey & Pullen, L.L.P.
Las Vegas, Nevada
April 21, 1997
300 South Fourth Street, Suite 900 Worldwide
P.O. Box 16044 Services
Las Vegas, Nevada 89101.0044 Through
(702) 386-5800 FAX (702) 385-9807 RSM International
