SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
AMENDMENT NO. 2 TO CURRENT REPORT ON FORM 8-K
FILED WITH THE COMMISSION ON OCTOBER 14, 1997
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 14, 1997
CONTINENTAL AMERICAN TRANSPORTATION, INC.
Exact name of Registrant as specified in charter)
Colorado 0-18729 84-1089599
(State or other (Commission (IRS employee
jurisdiction of file number) identification
incorporation no.)
495 Lovers Lane Road, Calhoun, Georgia 30701
- --------------------------------------------------------
(Address of principal executive office) Zip Code
Registration telephone number, including area code: (706) 629-8682
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Item 4. Changes in Registrant's Certifying Accountant.
Registrant hereby files its Amendment No. 2 to its Current
Report on Form 8-K, filed with the Securities and Exchange
Commission (the "Commission") on October 14, 1997, concerning
the termination of its former auditors, Rosenberg Rich Baker
Berman & Company ("Rosenberg Rich") on or about October 6,
1997 (the "Form 8-K'). Registrant filed Amendment No. 1 to the
subject Form 8-K on November 6, 1997, attaching as an exhibit
thereto a letter addressed to the Commission from Rosenberg
Rich, dated October 30, 1997 (the "Rosenberg Letter"). By
letter from the Commission, dated November 12, 1997,
Registrant was requested to provide additional disclosures
that are contained in this Amendment.
Initially, the Commission requests Registrant to clarify the
date of dismissal of Rosenberg Rich. Registrant had stated in
its Form 8-K that it advised Rosenberg Rich of its termination
on October 6, 1997; conversely, Rosenberg Rich, in the
Rosenberg Letter, advised the Commission that it received
notice of its termination as Registrant's independent auditors
on October 14, 1997. Registrant's President, Timothy Holstein,
to the best of his recollection, advised Rosenberg Rich's
managing partner of the dismissal by telephone on or about
October 6, 1997.
Secondly, with respect to the Rosenberg Letter, the Commission
requests Registrant to "...disclose the reportable event cited
in the former accountants letter...". Registrant's following
responses to this Commission request are specific as to the
requirements outlined in Item 304(a)(1)(iv), paragraphs (B)(E)
of Regulation S-B:
(a)(1)(iv)(B)(1): In the Rosenberg Letter, Registrant's former
auditors, Rosenberg Rich, disagreed with the statements made
by Registrant in the Form 8-K. Rosenberg Rich stated that by
earlier letter dated August 4, 1997 (the "August Rosenberg
Letter") and in connection with Rosenberg Rich's preparation
of draft consolidated balance sheets, statements of operations
and statements of cash flows at and for the six-month period
ended December 31, 1996 and the nine month period ended March
31, 1997 (the "Financial Statements"), it had previously
advised Registrant that it found Registrant's internal
accounting records to be in extremely poor condition, citing
as examples that cash accounts were not reconciled,
significant other balance sheet accounts were not documented
with supporting detail, intercompany account balances were not
in agreement and expense categories contained unusual
variances when compared to prior periods; continuing,
Rosenberg Rich stated in the August Rosenberg Letter that
Registrant and its subsidiaries failed to maintain effective
internal control and accounting systems sufficient to
safeguard its assets and report its performance, concluding
that these specified deficiencies, although not capable of
being quantified, may have a material effect on the Financial
Statements.
(a)(1)(iv)(B)(2): Not applicable.
(a)(1)(iv)(B)(3): Not applicable.
(a)(1)(iv)(C): The subject matter of (a)(1)(iv)(B)(1) is the
allegations set forth in the Rosenberg Letter
as well as in the "August Rosenberg Letter",
a copy of which is attached hereto as an
2
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Exhibit.
(a)(1)(iv)(D): The Board of Directors has not
discussed with Rosenberg Rich the
subject matter of the allegations
set forth in the Rosenberg Letter
nor those set forth in the August
Rosenberg Letter.
(a)(1)(iv)(E): Registrant has authorized Rosenberg Rich to
respond fully to any inquiries of Grant
Thornton LLP, Registrant's successor
accountant, concerning the subject matter of
the allegations set forth in the Rosenberg
Letter as well as those set forth in the
August Rosenberg Letter.
Item 7. Financial Statements and Exhibits.
(c)(16) Letter from Rosenberg Rich Baker Berman & Company to
Timothy Holstein, Chairman of the Board, Continental American
Transportation, Inc., dated August 4, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By: s/Timothy Holstein
Timothy Holstein, President
Dated: December 11, 1997
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EXHIBIT (C)(16)
Rosenberg Rich
Baker Berman & Company
380 Foothill Road
Bridgewater, New Jersey 08807
August 4, 1997
Timothy Holstein, Chairman of the Board
Continental American Transportation, Inc. and Subsidiaries
9495 Lovers Lane Road SE
Calhoun, GA 30701
Dear Mr. Holstein:
We have prepared, from your company's internal accounting records, draft
consolidated balance sheets, statements of operations and statements of cash
flows at and for the six-month period ended December 31, 1996 and the nine month
period ended March 31, 1997. Additionally, we have prepared separate draft
balance sheets and income statements for Continental American Transportation,
Inc. and each of its subsidiaries.
This financial information has been gathered without independent verification by
us. During the course of this project, we found your internal accounting records
to be in extremely poor condition. For example, cash accounts were not
reconciled, significant other balance sheet accounts were not documented with
supporting detail, intercompany account balances were not in agreement and
expense categories contained unusual variances when compared to prior periods.
As a public company, Continental American Transportation, Inc. and Subsidiaries
is required to maintain effective internal control and accounting systems
sufficient to safeguard its assets and report its performance. We found these
systems not to be in place.
The effect of these deficiencies on the financial statements described above,
although not capable of being quantified, may be material.
Please give your most serious consideration to the above and be guided
accordingly. If we can be of any further assistance, please advise.
Very truly yours,
s/Frank S. LaForgia
Frank S. LaForgia, CPA
Member of the Firm
FSL:rmt
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