UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) October 30, 1997
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Texas Equipment Corporation
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(Exact name of small business issuer as specified in its charter)
Nevada 33-47921-A 62-1459870
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(State or other jurisdiction (Commission File ( I.R.S.Employer
of incorporation) Number) Identification No.)
1305 Hobbs Hwy, Seminole, TX 79360
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(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code: (915) 758-3643
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(Former name, former address and former fiscal year,
if changed since last report)
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Item 4. Changes in Registrant's Certifying Accountant.
(a) On October 30, 1997, the Company's independent accountant, Killman, Murrell
& Co., resigned.
Throughout most of 1997, the Company has been in litigation with several
parties surrounding the acquisition of the registrant's wholly owned subsidiary,
Texas Equipment Co, Inc. In May of 1997 the registrant filed an action in Gaines
County, Texas in which the registrant named, among others, a principal, Michael
Killman, of its independent accountant as a defendant. The Company has been able
to settle all litigation relating to events surrounding the acquisition of Texas
Equipment Co., Inc. with the exception of the litigation relating to Mr.
Killman.
On October 27, 1997, the registrant amended its petition naming the firm of
Killman, Murrell & Co. as a defendant.
In a letter to the Securities and Exchange Commission dated October 30,
1997, Mr. Killman indicated that Killman, Murrell & Co. resigned as principal
accountants and auditors of the registrant. In such resignation letter, Mr.
Killman stated, and the Company concurs, that, in connection with the audits of
the two fiscal years ending December 31, 1996, and the subsequent interim
periods through October 30, 1997, there were no disagreements with the Company
on any matters of accounting principles, or practices, financial statement
disclosures, or auditing scope or procedures, which disagreements, if not
resolved would have caused the accounting firm to make references in connection
with its opinion to the subject matter of the disagreement. Mr. Killman further
stated, and the Company concurs, that the audit report for the years ended
December 31, 1995 and 1996 did not contain any adverse opinion or disclaimer of
opinion, nor was such report qualified or modified as to uncertainty, audit
scope or accounting principles.
Nonetheless, Mr. Killman indicated in the same letter to the Commission that
the firm resigned because "we believe that the current internal control
structure of Texas Equipment Corporation is not adequate to develop reliable
financial statements." The registrant disagrees with this statement.
The registrant's audited financial statements have not been qualified. No
audit or similar committee of the board of directors, or the board of directors,
discussed the subject matter of deficiencies of the registrant's current
internal control structure. The registrant plans to authorize the former
accountant to respond fully to the inquiries of the successor accountant
concerning the registrant's internal control structure as well as any other
matter relating the engagement of Killman, Murrell & Co. and that firm's
auditing activities.
The registrant believes the accounting process is critical for a number of
its constituencies as well as management control. These constituencies include
its stockholders and John Deere, and the registrant's rapid growth requires
heightened attention to all aspects of its accounting system and processes,
including internal control. While the registrant believes its systems, including
internal controls, are adequate, the registrant is actively improving its
accounting systems, including its internal controls. It has hired a controller
and chief financial officer, and several months ago the registrant hired a
consultant to review all of its processes, including its accounting processes.
In addition, the Company is actively recruiting outside directors.
(b) On November 3, 1997, the registrant engaged the firm of Mazars & Guerard,
LLP as its independent auditor. Mazars & Guerard, LLP previously audited the
Company's discontinued operations, Marinex Multimedia Corporation. The
registrant has not consulted with the new accounting firm regarding the issues
set forth in this Item 4. Nor has the registrant has not consulted the new
accounting firm with regard to the application of accounting principles to a
specified transation, either completed or proposed; or the type of audit opinion
that might be rendered on the registrant's financial statements.
Item 7. Financial Statements and Exhibits.
Exhibit 16. Letter re change in certifying accountant.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act or 1934,
the registrant has duly caused this report to be signed on its behalf, thereby
duly authorized.
Date: November 4, 1997
Texas Equipment Corporation
/s/ Paul Condit
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Paul Condit, President
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Exhibit 16
October 30, 1997
Offices of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Texas Equipment Corporation
Commission File Number: 33-47921-A
Dear Ladies and Gentlemen;
We were previously accountants and auditors for Texas Equipment Corporation and
under the date of February 12,1997, we reported on the consolidated financial
statements of Texas Equipment Corporation and Subsidiaries for the years ended
December 31, 1996 and 1995. On October 30, 1997, we resigned.
In connection with the audits of its two fiscal years ended December 31, 1996
and the subsequent interim periods through October 30, 1997, there were no
disagreements with Texas Equipment Corporation on any matters of accounting
principles or practices, financial statement disclosures, or auditing scope or
procedures, which disagreements if not resolved by us would have caused us to
make references in connection with our opinion to the subject matter of the
disagreement.
Our audit reports on the consolidated financial statements of Texas Equipment
Corporation and Subsidiaries as of and for the years ended 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.
We resigned as principal accountants and auditors because we believe that the
current internal control structure of Texas Equipment Corporation is not
adequate to develop reliable financial statements.
Very truly yours,
/s/ Michael J. Killman
Michael J. Killman, CPA
Killman, Murrell & Company, P.C.
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