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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): August 20, 1997
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RIVER OAKS FURNITURE, INC.
(Exact Name of Registrant as Specified in Its Charter)
MISSISSIPPI 0-22188 64-0749510
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification
Incorporation) Number)
3350 MCCULLOUGH BLVD.
BELDEN, MISSISSIPPI 38826
(Address of Principal Executive Offices) (Zip Code)
601-891-4550
(Registrant's Telephone Number, including Area Code)
NOT APPLICABLE
(Former Name)
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THIS CURRENT REPORT ON FORM 8-K CONTAINS FORWARD-LOOKING STATEMENTS.
FORWARD-LOOKING STATEMENTS MAY BE SIGNIFICANTLY AFFECTED BY CERTAIN RISKS AND
UNCERTAINTIES DESCRIBED IN THE COMPANY'S QUARTERLY AND ANNUAL REPORTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH ARE INCORPORATED HEREIN BY
REFERENCE (COMMISSION FILE NO. 0-22188).
ITEM 5. OTHER EVENTS.
As previously reported, following the Company's discovery that
certain of the Company's accounts were out of balance, the Board of Directors
of the Company, together with its outside legal counsel and BDO Seidman, LLP
("BDO"), undertook a comprehensive analysis of certain of the Company's accounts
and its accounting reconciliation procedures for the fiscal year ended December
31, 1996, and prior fiscal years. Also as previously reported, by letter dated
June 5, 1997, BDO resigned as the Company's independent certified public
accountants, and on June 10, 1997, the Company retained Horne CPA Group, PA
("Horne") as the Company's independent certified public accountants. Since its
engagement, Horne has been working with the Company to audit the Company's
financial statements.
As previously reported, the Company has not filed with the
Securities and Exchange Commission or with The Nasdaq National Market, Inc.
(the "Nasdaq National Market") the Company's Annual Report on Form 10-K for its
fiscal year ended December 31, 1996 or its Quarterly Report on Form 10-Q for
the period ended March 31, 1997. In addition, the Company has not filed its
Quarterly Report on Form 10-Q for the period ended June 30, 1997. The Company
is, therefore, in violation of the requirements of the Securities Exchange
Act of 1934, as amended, and the listing requirements of the Nasdaq National
Market. Due to these failures, and due to the inability of the Company to make
available its audited financial statements, The Nasdaq Stock Market, Inc.
informed the Company by letter dated August 20, 1997 that it had determined to
delist the Company's common stock from The Nasdaq Stock Market effective with
the close of business on August 20, 1997. A copy of such letter is attached to
this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by
reference.
The Company currently believes that the ongoing audit work of Horne
will be completed within the next few weeks. Upon the completion of such work,
the Company will make its financial statements available, will complete all
required filings with applicable regulatory agencies, and will seek the
relisting of the Company's common stock. No assurance can be given, however,
regarding when the audited financial statements of the Company will become
available or that the Company will successfully obtain the relisting of its
shares of common stock.
On August 6, 1997, the Company filed a complaint against BDO
alleging, among other things, professional malpractice, negligence, breach of
contract and breach of professional responsibilities and fiduciary duties. The
Company is seeking actual damages in the amount of $30,000,000, together with
punitive damages, from BDO. No assurance can be given that the Company will
prevail on any of these allegations or that it will ultimately recover any
damages, actual or punitive, from BDO.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No.
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99.1 Letter dated August 20, 1997 from The Nasdaq Stock
Market, Inc. to Johnny Walker.
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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.
RIVER OAKS FURNITURE, INC.
By: /s/ Stephen L. Simons
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Stephen L. Simons
Chairman of the Board and Chief Executive
Officer
Date: August 28, 1997
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EXHIBIT 99.1
THE NASDAQ STOCK MARKET, INC. NASDAQ
David A. Donohoe, Jr.
Counsel
August 20, 1997
Mr. Johnny Walker
Chief Financial Officer
River Oaks Furniture, Inc.
P.O. Box 480
Belden, MS 38826
Re: River Oaks Furniture, Inc.
Nasdaq Listing Qualifications Panel
Decision NQ 1687N-97
Dear Mr. Walker:
This is to inform you, that pursuant to the August 7, 1997 hearing before a
Nasdaq Listing Qualifications Panel (the "Panel"), a determination has been made
in the matter of River Oaks Furniture, Inc. (the "Company") and its request for
continued listing on the Nasdaq National Market(R), pursuant to an exception to
the filing requirement, as set forth in NASD Marketplace Rule 4310(c)(14).
After a careful review of the record, the Company's submissions and its oral
representations, the Panel made the following findings. The Company failed to
file its Form 10-K for the year ended December 31, 1996, and the Form 10-Q for
the quarter ended March 31, 1997. In addition, the Company advised the Panel
that it will not be able to timely file the Form 10-Q for the quarter ended June
30, 1997. The Company does not expect to become current in filing until early
September 1997.
During the course of the year-end procedures, the Company discovered that its
accounts receivable had been materially misstated. The Company informed its
auditors, BDO Seidman ("Seidman"), of its findings. The Company represented that
Seidman initially committed to work through the accounting irregularities and to
complete the 1996 audit. However, on June 5, 1997, Seidman resigned, and on June
17, 1997 they withdrew their opinions on financial statements from earlier
years. The Company retained new auditors on June 12, 1997.
The Company attributes its problems to those of a small company experiencing
substantial revenue growth without proper systems in place. The Company
primarily attributed the specific errors to one individual in the accounting
department who has been terminated. The Company does not believe that the
individual financially benefited from the misstatements. The Company argues that
it now has the proper systems in place to prevent future such occurrences. It is
expected that the Company will have to restate its financial statements for a
minimum of 1996, 1995 and 1994. The aggregated restatement is expected to be
$7.2 million.
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The Panel was of the opinion that the Company has failed to comply with NASD
Marketplace Rule 4310(c)(14). The Panel noted that the filings are
extraordinarily late, so much so that the failure to complete the audit is
affecting three separate filings. The Panel was further of the opinion that the
lack of audited financial statements prevents the investing public from
obtaining information necessary to make an investment decision to buy or sell
the Company's securities. Finally, the Panel noted that one of the primary
obligations of a Nasdaq issuer is to timely file its financial statements.
ACCORDINGLY, THE PANEL DETERMINED TO DELIST THE COMPANY'S SECURITIES FROM THE
NASDAQ STOCK MARKETsm EFFECTIVE WITH THE CLOSE OF BUSINESS AUGUST 20, 1997.
The Company should be aware that the Nasdaq Listing and Hearing Review Committee
("Review Committee") may, on its own motion, determine to review any
Qualifications Panel decision within 45 calendar days after issuance of the
written decision. If the Review Committee determines to review this decision it
may affirm, modify, reverse, dismiss, or remand the decision to the
Qualifications Panel. You will be notified immediately in the event the Review
Committee determines that this matter will be called for review.
The Company may also request the Review Committee to review this decision. Your
request for review must be made in writing within 15 days from the date of this
decision to: Sarah Nelson Bloom, The Nasdaq Stock Market, Office of General
Counsel, 1735 K Street, N.W., Washington, DC 20006, (202) 728-8478. Please be
advised that the institution of a review, whether by way of your request, or on
the initiative of the Review Committee , will not operate as a stay of this
decision.
If you have any questions, please do not hesitate to contact me at (202)
496-2529.
Sincerely,
/s/ David A. Donohoe, Jr.
David A. Donohoe, Jr.
Counsel
Listing Qualifications Hearings
