1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20001 AA
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) September 10, 1997
M.G. Products, Inc.
(Exact Name of Registrant as Specified in Charter)
California 0-18660 33-0098392
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
8154 Bracken Creek, San Antonio Texas 78266-2143
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (210) 651-5188
Item 4. Changes in Registrant's Certifying Accountant.
a. On September 10, 1997, the Registrant received notice
that the client/auditor relationship between M.G. Products, Inc.
and Ernst & Young L.L.P. ceased. The Company considers this
to be a notification of the resignation of the Company's
Certifying Accountant.
The auditor's report of Ernst & Young L.L.P. on the
financial statements of M.G. Products,
Inc. and subsidiaries as of December 31, 1996 and for
each of the years in the two year period
ending December 31, 1996 and 1995, did not contain any
adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or
accounting principles, except that the auditors' report for
the period ending December 31, 1996, contained a separate paragraph
that stated that:
"The accompanying financial statements have been
prepared assuming that M.G. Products,
Inc. will continue as a going concern. As more fully
described in Note 2, the Company has experienced recurring
operating losses and cash flow shortages, causing the loss
of a portion of its customer base and resulting in excess inventory.
In addition, the Company must negotiate the refinancing of a
portion of its borrowings and may be liable for significant future
rental payments for closed facilities. These matters
have significantly weakened the Company's financial position
and its ability to purchase materials and meet current operating
obligations. These conditions raise substantial doubt
about the CompanyOs ability to continue
as a going concern. Management's plans in regard to
these matters are more fully described in Note 2.
The financial statements do not include any
adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amounts and
classification of liabilities that may result from the outcome
of this uncertainty."
In connection with the audits of the two fiscal years
ended December 31, 1995 and 1996, and in the subsequent
period through September 10, 1997, there have been no
disagreements with Ernst & Young L.L.P. on any matter
of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures which
disagreements, if not resolved to their satisfaction, would
have caused them to make reference in connection with their
opinion to the subject matter of the disagreement.
There were no "reportable events" (as defined in Regulation
S-K, Item 304) occurring during the fiscal years ending
December 31, 1996 and 1995, nor during the subsequent
interim period through September 10, 1997. The cessation of
the client/auditor relationship between M.G. products,
Inc. and Ernst & Young L.L.P. was approved by the Board of
Directors of the Registrant.
b. Effective September 15, 1997, no other auditor has been
appointed by the Board of Directors of the Registrant.
Item 5. Other Events.
The Directors, Charles Chapman and Martin Goodman,
resigned on August 22, 1997, as a result of which there are
now three vacancies on the Board of Directors.
These vacancies have not been filled.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(a) Financial Statements of Business Acquired.
None
(b) Pro Forma Financial Information.
None
(c) Exhibits.
Exhibit 1 Ernst & Young letter of resignation
dated September 10, 1997.
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.
M.G. PRODUCTS, INC.
By /s/ Eric Williams
Eric Williams
Chief Financial Officer
DATE: September 15, 1997
EXHIBIT INDEX
Exhibit No. Description Sequentially Numbered Page
Exhibit 1 Letter dated September 10,1997 5
ERNST & YOUNG L.L.P.
Frost Bank Tower, Suite 1900
100 West Houston Street
San Antonio, Texas 78299
September 10, 1997
Mr. Eric Williams
Chief Financial Officer
MG Products, Inc.
8154 Bracken Creek
San Antonio, Texas 78266
Dear Mr. Williams:
This is to confirm that the client/auditor relationship
between MG Products, Inc. and Ernst & Young LLP has ceased.
Sincerely,
/s/ Thomas H.
Richter
Thomas H. Richter
Partner
cc: Office of the Chief Accountant
SEC PS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, NW
Washington, DC 20549
