<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 1 TO 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): DECEMBER 10, 1996
HEADSTRONG GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-47567 22-3663311
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
5 Lexington Avenue, East Brunswick, New Jersey 08816
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 254-3433
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On December 11, 1996, Arthur Andersen, LLP ("AA") declined to stand
for re-election as the Registrant's principal accountant. The Registrant
anticipates that AA will assist the Registrant with respect to the preparation
of certain unaudited financial reports. The Registrant is in the process of
selecting a new principal accountant to audit the Registrant's financial
statements.
The decision to change accountants was approved by the Registrant's
board of directors.
The Registrant and AA have not, in connection with the audit of the
Registrant's financial statements for each of the prior two years for the
periods ended December 31, 1995 and December 31, 1994 or any subsequent interim
period prior to and including December 11, 1996, had any disagreement on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreement, if not resolved to AA's
satisfaction, would have caused AA to make reference to the subject matter of
the disagreement in connection with its reports.
There were no disagreements or reportable events (as defined in
Regulation S-K item 304(a)(1)(iv) and (v)) during the two fiscal periods ended
December 31, 1995 and December 31, 1994 and the subsequent interim period prior
to and including December 11, 1996.
The report of AA on the Registrant's financial statements for the
year ended December 31, 1995 included a "going-concern" uncertainty
modification. The report of AA on the Registrant's financial statements for the
year ended December 31, 1994 does not include a "going-concern" uncertainty
modification. The reports of AA for each of the prior two years for the periods
ended December 31, 1995 and December 31, 1994 do not contain an adverse opinion
or a disclaimer of opinion, and are not qualified or modified as to uncertainty,
audit scope, or accounting principles.
As noted above, AA's declining to stand for re-election was not the
result of any disagreement with AA on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
16.1 Letter from AA regarding its concurrence with the
Registrant's statement regarding change of accountants.
-2-
<PAGE> 3
ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.
In December 1996, the Registrant completed the offer and sale of 6%
convertible debentures in the aggregate principal amount of $550,000 in reliance
upon Regulation S under the Securities Act of 1933. This offer and sale
consisted of three separate transactions consisting of $100,000 principal amount
with net proceeds to the Registrant of $79,691.70 on December 10, 1996; $100,000
principal amount with net proceeds to the Registrant of $84,691.70 on December
11, 1996 and $350,000 principal amount with net proceeds to the Registrant of
$305,091.70 on December 20, 1996. The Placement Agent for all of the
transactions was Shane Henty Sutton and the Buyer was Karela Gisele Pty., Ltd.
Net proceeds of the offering to the Registrant were $469,475.10 after payments
to the Placement Agent of commissions, escrow fees, disbursements and other
expenses (aggregate $80,524.90).
The debentures are convertible into shares of the Registrant's
common stock upon the expiration of 45 days from the date of sale and at a price
per share equal to a 40% discount of the lower of either (i) the closing price
of the common stock on the date of conversion or (ii) the average of the daily
low price traded for the common stock for the five trading days prior to the
date of conversion. In the event that the debentures are not converted into
shares of the Registrant's common stock, the debentures will be due on January
20, 1999; January 21, 1999 and December 20, 1998 for the debentures sold on
December 10, 1996, December 11, 1996 and December 20, 1996, respectively.
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.
HEADSTRONG GROUP, INC.
(Registrant)
Date: January 21, 1997 By: /s/ Dale Friedman
-----------------------------
Dale Friedman, President
-3-
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
16.1 Letter from AA regarding its concurrence with the
Registrant's statement regarding change of accountants.
-4-
<PAGE> 1
Exhibit 16.1
[Arthur Andersen Letterhead]
January 16, 1997
Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549
Gentlemen:
We have read Item 4 in the attached Amendment No. 1 to Form 8-K dated December
10, 1996 of Headstrong Group, Inc. to be filed with the Securities and Exchange
Commission and are in agreement with the statements contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
Arthur Andersen LLP
-5-
