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): March 25, 1998
Data Systems Network Corporation
(Exact name of registrant as specified in its charter)
Michigan
(State or other jurisdiction of incorporation)
1-13424 38-2649874
(Commission File Number) (IRS Employer Identification No.)
34705 West Twelve Mile Road, Suite 300, Farmington Hills, Michigan 48331
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 489-8700
Not Applicable
(Former name or former address, if changed since last report)
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Data Systems Network Corporation (the "Company") engaged Plante &
Moran, LLP as its new independent accountants as of March 25, 1998. During
the two most recent fiscal years and through March 25, 1998, the Company has
not consulted with Plante & Moran, LLP regarding either (i) the application
of accounting principles to a specified transaction, either completed or
proposed; or the type of audit opinion that might be rendered on the
Company's financial statements, and either a written report was provided to
the Company or oral advice was provided that Plante & Moran, LLP concluded
was an important factor, considered by the Company in reaching a decision as
to the accounting, auditing or financial reporting issue; or (ii) any matter
that was either the subject of disagreement (as the term is defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of
Regulation S-K) or a reportable event (as that term is described in Item
304(a)(1)(v) of Regulation S-K).
ITEM 5. OTHER EVENTS.
On March 23, 1998, the Company issued a press release announcing the
status of the investigation of a board-appointed special committee looking
into previously announced accounting irregularities. The press release is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit 99.1 Press Release, dated March 23, 1998.
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.
March 31, 1998 DATA SYSTEMS NETWORK CORPORATION
/s/ Michael W. Grieves
-----------------------------------
By: Michael W. Grieves
President and Chief Executive
Officer
NEWS RELEASE
FOR IMMEDIATE RELEASE
March 23, 1998
Data Systems Network Corporation Announces
Status of Investigation
FARMINGTON HILLS, MICHIGAN - Data Systems Network Corporation (Nasdaq: DSYS;
Pacific Stock Exchange: DSY) announced today that the board-appointed
special committee looking into previously announced accounting
irregularities is nearing conclusion of its investigation.
Based on preliminary findings thus far, the company has taken a number of
steps to institute additional financial controls.
- - The board of directors has begun an active search for a chief
operating officer to strengthen internal control measures and the
company's senior management team.
- - It is continuing its search for a permanent chief financial officer
to replace Philip M. Goy, who resigned last month.
- - It is engaged in discussions with a major auditing firm to replace
KPMG Peat Marwick, whose resignation was recently received.
- - The company has also recently brought aboard a new controller and
added two financial analysts.
"In light of our rapid growth, we have instituted these additional controls
to help ensure the integrity of our financial reporting," Chairman,
President and CEO Michael W. Grieves said:
The company expects that the 1997 audit will be completed by the new audit
firm. The company anticipates announcing an update to the progress of the
1996 restatement within two weeks. Based on preliminary findings of the
investigation, the company believes the accounting issues raised in 1996 and
additional determined reserves and allowances will have an impact of $1.5 -
2 million in 1996. Although the company anticipates that 1997 revenue
numbers should not be impacted and 1997 will be a record revenue year, 1997
earnings will be impacted, resulting in a possible loss.
The board will retain an independent investment banking firm to advise the
firm on financial and strategic matters including various options to enhance
shareholder value, Grieves said.
Data Systems provides computer network services and products that enable the
control of complex distributed computing environments and allow companies to
capitalize on their investments in technology and people. The company
provides a wide range of network integration services including
installation, consultation, technical support and training. It also
provides specialized services in network management, application
development, imaging systems and Year 2000 consulting. Based in Farmington
Hills, Michigan, Data Systems has 21 offices and more than 250 employees.
-0-
For additional information contact:
Gabe Werba, Durocher Dixson Werba LLC
313-259-5803
Certain statements in this release constitute "forward looking statements"
within the meaning of the federal securities laws. Such statements involve
known and unknown risks and uncertainties which may cause the company's
actual results, performance or achievements to be materially different than
any future results, performance or achievements implied in this release.
Investors are cautioned that all forward-looking statements involve risks
and uncertainty.
