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______________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
FEBRUARY 13, 1998
UNIVERSAL SEISMIC ASSOCIATES, INC.
Exact Name of Registrant as Specified in its Charter
DELAWARE 0-19971 76-0256086
State of Incorporation or Commission File Number I.R.S. Employer
Organization Identification No.
16420 PARK TEN PLACE
SUITE 300 77084-5051
HOUSTON, TEXAS (Zip Code)
Address of Principal Executive Offices
(281) 578-8081
Registrant's telephone number,
including area code
______________________________________________________________________________
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
(a) Commencing in February 1997, the Audit Committee of the Board of
Directors of Universal Seismic Associates, Inc. (the "Company") conducted a
review of the Company's financial statements in response to allegations by a
Company stockholder who also pursued litigation against the Company. In
connection with its review, the Audit Committee engaged its independent
accountants, Coopers & Lybrand L.L.P. ("Coopers"), to review the affected
financial statements. The Audit Committee was also advised by independent
legal counsel and independent accountants engaged by such counsel. Based upon
Coopers' review and the preliminary recommendations of the Audit Committee, the
Company restated its financial statements for the quarters ended September 30,
1996 and December 31, 1996 in Forms 10-QSB/A filed May 21, 1997. Based on the
results of its review, Coopers notified the Audit Committee that it would no
longer accept the representations of the Company's Chief Financial Officer for
the purpose of reporting on the Company's financial statements.
In August 1997 Joe T. Rye was appointed Chief Accounting Officer of
the Company, and the Company's Chief Financial Officer was removed from the
process of preparing the Company's financial statements. On November 10, 1997
Mr. Rye was promoted to Chief Executive Officer and elected a director of the
Company. On February 5, 1998, Ron England resigned as Chief Financial Officer
and director of the Company. Mr. Rye is now also serving as acting Chief
Financial Officer. The Board of Directors is seeking to hire a new Chief
Financial Officer for the Company as soon as practicable.
In December 1997 additional facts came to the attention of management
which suggested that the financial statements for fiscal years 1996 and 1997
may have been misstated. Company management immediately communicated this
information to Coopers, the Company's independent accountants, and the
Company's Audit Committee. The Audit Committee investigated these new items
with the assistance and advice of independent legal counsel and independent
accountants engaged by such counsel. Company management also discussed these
new items and a possible restatement of the Company's 1996 and 1997 financial
statements with Coopers.
As a result of its investigation, the Audit Committee determined that
the newly discovered information was likely to result in a restatement of the
Company's financial statements for fiscal years 1996 and 1997. The Audit
Committee recommended that the Company engage a new independent accountant to
perform an audit of the Company's financial statements for fiscal years 1996 and
1997, which financial statements, based on the results of that audit, may have
to be restated. The Company believes that the new audit by newly engaged
independent accountants, the anticipated restatement of the Company's 1996 and
1997 financial statements, the resignation of the Company's former Chief
Financial Officer, the appointment of the Chief Executive Officer as acting
Chief Financial Officer, and the immediate commencement of a search for a new
Chief Financial Officer constitute appropriate remedial action under the
circumstances.
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The Company does not anticipate that any restatement based on the
newly discovered facts will result in an adverse impact on the Company's
balance sheet as of June 30, 1997 or the Company's financial statements for any
periods subsequent to June 30, 1997. In addition, any restatement will not
adversely impact the liquidity of the Company. However, the Company believes
that it is likely that the Company will restate its financial statements for
fiscal years 1996 and 1997, and that the restated financial statements will
reflect a negative impact on the Company's net income for fiscal year 1996 and
positive impact on fiscal year 1997 net income. The nature of the possible
adjustments to the financial statements generally relate to timing of revenue
recognition.
In a meeting on February 13, 1998, Coopers verbally advised the
Company that it was unwilling to be associated with the Company's financial
statements and resigned as independent accountants for the Company. Coopers
also advised the Company that, in conjunction with its resignation, its
opinions with respect to the financial statements of the Company as of and for
the years ended June 30, 1996 and 1997 should no longer be relied upon.
Coopers confirmed its resignation in a letter dated February 13, 1998, a copy
of which is filed as an exhibit to this report. On February 16, 1998 Coopers
discussed its resignation by telephone with the Chairman of the Audit
Committee. On February 17, 1998 and at the request of the Company, Coopers met
with the Company's Chief Executive Officer and a member of the Audit Committee
to discuss its resignation.
Coopers' resignation was not recommended or approved by the Company's
Board of Directors or Audit Committee, and Coopers declined the Company's
invitation to meet with the full Audit Committee and its advisors to discuss
its resignation.
During the Company's 1996 and 1997 fiscal years and the subsequent
interim period through February 13, 1998, there were no disagreements with
Coopers on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which, if not resolved to
Coopers' satisfaction, would have caused it to make reference to the subject
matter of the disagreement in connection with its report on the Company's
financial statements.
It will be necessary for the Company to engage new independent
accountants to audit the Company's financial statements for fiscal years 1996
and 1997 and subsequent years. The Company has authorized Coopers to respond
fully to the inquiries of any successor independent accountant concerning the
above events.
The Company provided Coopers with a copy of the foregoing disclosures
and requested in writing that Coopers furnish it with a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with such
disclosures and, if not, stating the respects in which it does not agree. A
copy of such letter is filed as an exhibit to this report in accordance with
Item 601 of Regulation S-B. The Company notes that the second sentence of the
second paragraph in such letter does not accurately describe the statement in
this report about the Audit Committee's investigation.
The above contains forward-looking information based on certain
assumptions and contingencies that involve risks and uncertainties. The
forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and relate to the effects
of a possible restatement of the Company's financial statements. In making
these
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forward-looking statements, the Company assumes, among other things, that there
are no additional facts that will impact the Company's financial statements.
There can be no assurance that any of the Company's assumptions are accurate.
(b) The Company has not yet engaged a successor independent accounting firm.
<TABLE>
<S> <C>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibits are filed as part of this report:
16.1 Letter, dated February 13, 1998, from Coopers & Lybrand L.L.P. to Universal Seismic Associates, Inc.
resigning as independent accountants.
16.2 Letter, dated February 26, 1998, from Coopers & Lybrand L.L.P. to the Securities and Exchange
Commission.
16.3 Letter, dated February 23, 1998, from Coopers & Lybrand L.L.P. to Universal Seismic Associates, Inc.
confirming resignation as independent accountants.
</TABLE>
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SIGNATURE
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.
Dated: March 2, 1998
UNIVERSAL SEISMIC ASSOCIATES, INC.
By: /s/ Joe T. Rye
------------------------------
Joe T. Rye, President and
Chief Executive Officer
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INDEX TO EXHIBITS
<TABLE>
<S> <C>
16.1 Letter, dated February 13, 1998, from Coopers & Lybrand L.L.P. to Universal Seismic Associates, Inc.
resigning as independent accountants.
16.2 Letter, dated February 26, 1998, from Coopers & Lybrand L.L.P. to the Securities and Exchange
Commission.
16.3 Letter, dated February 23, 1998, from Coopers & Lybrand L.L.P. to Universal Seismic Associates, Inc.
confirming resignation as independent accountants.
</TABLE>
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EXHIBIT 16.1
February 13, 1998
Mr. Joe T. Rye
Universal Seismic Associates, Inc.
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Dear Mr. Rye:
As discussed today, Coopers & Lybrand L.L.P. has resigned effective February
13, 1998 as the independent accountants of Universal Seismic Associates, Inc.
and subsidiaries (the "Company"). In conjunction with such resignation, our
reports with respect to the financial statements of the Company as of and for
the years ended June 30, 1997 and 1996 should no longer be relied upon.
The Company should promptly notify the Securities and Exchange Commission on
Form 8-K that our reports cited above should not be relied upon or are
withdrawn. Prompt notification of this action should also be given to the
appropriate stock exchanges, other regulatory agencies and other persons known
to or which you believe have relied upon or who are presently relying upon our
reports. Enclosed is a letter that is required by the SEC Practice Section
Executive Committee of the American Institute of Certified Public Accountants.
We will fax this letter on February 17, 1998.
Please keep us advised of all such communications and actions taken in this
regard.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
Enclosure
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February 17, 1998
Mr. Joe T. Rye
Universal Seismic Associates, Inc.
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Dear Mr. Rye:
This is to confirm that the client-auditor relationship between Universal
Seismic Associates, Inc. (Commission File Number 0-19971) and Coopers & Lybrand
L.L.P. has ceased.
Very truly yours,
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, N.W.
Washington, D.C. 20549
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EXHIBIT 16.2
February 26, 1998
Securities and Exchange Commission
450 5th Street, NW
Washington, DC 20549
Gentlemen:
We have read the statements made by Universal Seismic Associates, Inc. (the
"Company") which we understand have been filed with the Commission, pursuant to
Item 4 of Form 8-K, as part of the Company's Form 8-K dated February 13, 1998
(copy attached). We agree with the statements made therein referring to our
Firm. We have no basis to agree or disagree with any other statements made
therein, except as follows:
With respect to the misstatements described in the first sentence of the third
paragraph, we were given information on more than one occasion that led us to
conclude that such misstatements may have been intentional. As stated in the
Form 8-K, an investigation is being conducted by independent legal counsel for
the Company's Audit Committee. We are awaiting the results of that
investigation to determine whether illegal acts did occur and, if so, whether
appropriate remedial actions have been taken by the Company.
With respect to the last sentence of the third paragraph, we informed the
Company on February 13, 1998 that, in our opinion, such restatements were
required.
The two references to "net income" in the fourth paragraph should have been to
"net loss."
As stated in the sixth paragraph, we declined the Company's invitation to meet
with the full Audit Committee to discuss our resignation. As stated in the
fifth paragraph, we had already discussed our resignation with the Chairman and
one of the other members of the Audit Committee.
With respect to the reports referred to in the seventh paragraph, it should be
noted that these are the reports that, as stated in the fifth paragraph, should
no longer be relied on.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
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EXHIBIT 16.3
February 23, 1998
Mr. Joe T. Rye
Universal Seismic Associates, Inc.
16420 Park Ten Place, Suite 300
Houston, Texas 77084-5051
Dear Mr. Rye:
This is to confirm that the client-auditor relationship between Universal
Seismic Associates, Inc. (Commission File Number 0-19971) and Coopers & Lybrand
L.L.P. has ceased.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, N.W.
Washington, D.C. 20549
