<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: November 2, 1998
DYNA GROUP INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
000-17385 87-0404753
(Commission File Number) (IRS Employer Identification No.)
1661 S. Seguin Avenue, New Braunfels, Texas 78130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (830) 620-4400
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNT
(b) SECTION 304 (a) (2)
1. On September 28, 1998 Dyna Group International, Inc. (the
"Company") named Padgett, Stratemann & Co., L.L.P. as its new
independent auditors. (refer to exhibit no. 1)
2. The prior independent auditors of BDO Seidman was contacted by
Padgett, Stratemann & Co.,L.L.P. requesting the review of
prior year audit workpapers.
3. BDO Seidman responded on November 2, 1998 with a letter to
the Company requesting release of information to Padgett,
Stratemann, & Co.,L.L.P. (refer to exhibit no. 2)
4. On May 13 1998, BDO Seidman was notified of their released. An
8-K was filed along with BDO Seidman's response on May 19,
1998.
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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 authorized.
Dyna Group International, Inc.
(Registrant)
Date: November 4, 1998 /s/ ROGER R. TUTTLE
----------------------------------------
(Signature) Roger R. Tuttle, Chairman
of the Broad and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NO. EXHIBIT NAME NUMBERED PAGE
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<S> <C> <C>
1 ENGAGEMENT LETTER 4 THRU 7
2 RELEASE OF INFORMATION 8 AND 9
</TABLE>
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[PADGETT, STRATEMANN, & CO., L.L.P. LETTERHEAD]
September 28, 1998
Mr. Roger Tuttle
Dyna Group International, Inc.
1661 S. Seguin
New Braunfels, Texas 78130
Dear Mr. Tuttle:
This letter is to explain our understanding of the arrangements for the
services we are to perform for Dyna Group International, Inc. and Subsidiary
(the "Company") for the year ending December 31, 1998. We ask that you either
confirm or amend this understanding.
We will perform an audit of Dyna Group International, Inc. and Subsidiary's
consolidated financial statements as of and for the year ending December 31,
1998. We understand that the financial statements will be prepared in
accordance with generally accepted accounting principles. We will also perform
the additional procedures and reviews required for our report to be included in
the Company's Form 10K.
We will conduct the 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 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 audit will provide a reasonable
basis for our report.
On January 1, 2000, information technology experts believe that many
application systems may fail as a result of erroneous calculations and data
integrity problems. The effects of this issue will vary from system to system
and may adversely affect an entity's operations as well as its ability to
prepare financial statements.
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Mr. Roger Tuttle
Dyna Group International, Inc.
New Braunfels, Texas
September 28, 1998 - page 2
An audit of the financial statements made in accordance with generally accepted
auditing standards is not designed to determine whether your information systems
are Year 2000 compliant. Furthermore, we remind you that we have no
responsibility in regards to Dyna Group International, Inc. and Subsidiary's
efforts to make your information systems Year 2000 compliant nor to provide you
with assurance on whether the Company has addressed or will be able to address
all of the affected systems on a timely basis. The responsibilities necessary to
conform the Company's information systems to be Year 2000 compliant are those of
the Company's management. However, we may choose to communicate to management of
the Company Year 2000 Issue matters that come to our attention during the course
of our engagement.
We will notify you immediately if circumstances relating to the condition of
your records and/or the availability of sufficient, competent evidential matter
arise during the course of our work which in our professional judgment prevent
us from completing the audit. In such a situation, we retain the unilateral
right to take any course of action permitted by professional standards,
including withdrawal from the engagement.
An audit is subject to the inherent risk that material errors, irregularities,
or illegal acts, including fraud or defalcations, if they exist, will not be
detected. Should you wish us to direct special procedures to such matters, we
would be pleased to work with you to develop a separate engagement for that
purpose.
The consolidated financial statements are the responsibility of the Company's
management. Management has the responsibility for properly recording
transactions in the records, for safeguarding assets, and for preparing reliable
financial statements. At the conclusion of our audit, we will request certain
written representations from you about the consolidated financial statements and
matters related thereto.
During the course of our engagement, we may accumulate records containing data
which should be reflected in your books and records. You will determine that all
such data, if necessary, will be so reflected. Accordingly, you will not expect
us to maintain copies of such records in our possession.
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Mr. Roger Tuttle
Dyna Group International, Inc.
New Braunfels, Texas
September 28, 1998 - page 3
The assistance to be supplied by your personnel will be described in the client
participation list, to be provided at a later date, which outlines the specific
schedules and analysis that should be completed by your personnel, including
the dates when the information should be available to us. The timely completion
of this work is essential to the timely completion of the audit.
Our fee for providing the above services will range from $26,000 to $28,000,
which includes out-of-pocket expenses, assuming that the above schedules and
other items are received by us on a timely basis. It also assumes that the
Company's Mexican joint venture will be audited by an acceptable independent
CPA firm. Interim billings will be submitted a periodic dates to cover charges
and expenses incurred. Bills for services are due when provided, payable in San
Antonio, Texas. If we discover any material changes in time requirements or
nature of services, we will discuss the situation with you before we proceed.
This engagement includes only those services specifically described in this
letter. Appearances before judicial proceedings, governmental organizations, or
regulatory bodies arising out of this engagement will be billed to you
separately.
Certain additional reviews and other procedures are required under our quality
assurance system whenever our reports are included, or we are named as,
accountants, auditors, or "experts" in a document used in a public or private
offering of equity or debt securities. Accordingly, you agree that you will not
include our reports, or otherwise make references to us, in any public or
private securities offering without first obtaining our consent. You also agree
that any other public distribution of our report will be submitted to us for
approval prior to distribution. You agree to provide us with proofs or masters
of such offering documents for our review and approval before printing, and
with a copy of the final reproduced material for our approval before it is
distributed. Our fees for review and approval of such proofs or masters, and
any related services to be provided in connection therewith, will be
established with you at the time such services are determined to be necessary
or appropriate.
Although we do not anticipate any disagreement, should you become dissatisfied
with our services at any time, we ask that you bring your dissatisfaction
to our attention promptly. If we are unable to resolve matters to your
satisfaction, it is agreed that you will participate in mediation, under the
Commercial Mediation Rules of the American Arbitration Association, before you
assert any claim.
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Mr. Roger Tuttle
Dyna Group International, Inc.
New Braunfels, Texas
September 28, 1998 - page 4
This letter constitutes the complete and exclusive statement of agreement
between Padgett, Stratemann & Co., L.L.P. and Dyna Group International, Inc. and
Subsidiary, superseding all other communications, with respect to the terms of
the engagement between the parties.
If you are in agreement with the terms of this letter, please sign one copy and
return it for our files.
We have enjoyed our past association with your Company and appreciate the
opportunity to continue providing professional services.
Sincerely,
/s/ BILL K. WISECARVER
Bill K. Wisecarver
Partner
BKW:kas
The foregoing letter fully described our understanding and is accepted by us.
DYNA GROUP INTERNATIONAL, INC. AND SUBSIDIARY
/s/ ROGER TUTTLE
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Roger Tuttle
Oct. 14, 1998
- -------------------------------------------
Date
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[BDO SEIDMAN, LLP LETTERHEAD]
November 2, 1998
Dyna Group International, Inc.
1661 S. Seguin Street
New Braunfels, Texas 78130
and
Padgett, Stratemann & Co., L.L.P.
1635 N.E. Loop 410, Suite 700
San Antonio, Texas 78209-1684
Gentlemen:
We have previously audited, in accordance with generally accepted auditing
standards, the December 31, 1997, financial statements of Dyna Group
International, Inc. (DGI). We rendered a report on those financial statements
and have not performed any audit procedures since the audit report date. You
have requested that we allow Padgett, Stratemann & Co., L.L.P. (PS & Co.), as
successor accountants for DGI, access to our workpapers prepared in connection
with that audit. Subject to the following, we will allow PS & Co. access to our
workpapers, other than certain workpapers we consider proprietary to BDO
Seidman, LLP.
Our audit, and the workpapers prepared in connection therewith, of DGI's
financial statements was not planned or conducted in contemplation of your
review. Therefore, items of possible interest to you may not have been
specifically addressed. Our use of professional judgement and the assessment of
materiality for the purpose of our audit means that matters may have existed
that would have been assessed differently by you. We make no representation as
to the sufficiency or appropriateness of the information in our workpapers for
your purposes.
We understand that the purpose of PS & Co.'s review is to obtain information
about DGI and our 1997 audit results to assist PS & Co. in planning its 1998
audit of DGI. For that purpose only, we will provide PS & Co. access to our
workpapers which relate to that objective.
Because PS & Co.'s review of our workpapers is undertaken solely for the purpose
described above, and will not entail a review of all of our workpapers, PS & Co.
agrees that (a) it is unable to, and will not, comment orally or in writing to
anyone as a result of that review as to whether our audit was performed in
accordance with generally accepted auditing standards, and (b) it will not
provide expert testimony or litigation support services involving issues
relating to the quality of our audit. Furthermore, PS & Co. agrees that it does
not intend to use the audit results documented in our workpapers as audit
evidence in rendering its opinion on the 1998 financial statements of DGI,
except as contemplated in Statement on Auditing Standards No. 84.
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[BDO LOGO] Dyna Group International, Inc.
Padgett, Stratemann & Co., L.L.P.
November 2, 1998
Page 2
Upon request and reimbursement of associated costs, copies will be provided to
PS & Co. of those workpapers that provide factual information about DGI. PS &
Co. agrees to subject any such copies or information otherwise derived from our
workpapers to its normal policy for retention of working papers (if more
restrictive retention is requested, so describe) and protection client
confidential information. PS & Co. agrees to advise us promptly of and, in any
event, in advance of compliance with, any request by subpoena or court order
for access to its workpapers that include copies of our workpapers or
information otherwise derived therefrom.
Please confirm your agreement with the foregoing by signing and dating a copy
of this letter and returning it to us.
Very truly yours,
/s/ BDO SEIDMAN, LLP
The foregoing is accepted:
By: /s/ ROGER R. TUTTLE Date: 11-2-98
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Roger R. Tuttle
Padgett, Stratemann & Co., L.L.P.
By: Date:
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