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): May 18, 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)
<PAGE>
ITEM 5. OTHER EVENTS.
On May 18, Data Systems Network Corporation issued a press release
regarding release dates of its independent auditors' report and first
quarter earnings. The press release is attached hereto as Exhibit 99.1, and
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99.1 Press Release, dated May 18, 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.
May 21, 1998 DATA SYSTEMS NETWORK CORPORATION
By: /s/ Michael W. Grieves
------------------------------
Michael W. Grieves
Chairman, President and Chief
Executive Officer
Exhibit 99.1
For Additional Information contact:
Spencer Maus, Director
312.726.3200 ext. 205
[email protected]
Data Systems Network Corporation Issues Statement Regarding Release Dates of
Independent Auditors Report and 1st Quarter Earnings
Farmington Hills, MI--May 18, 1998--Data Systems Network Corporation
(NASDAQ: "DSYSE") today announced that the Audit Committee, of the Board of
Directors, in agreement with the Company's auditors, Plante & Moran, LLP
approved a time table for completion and release of the restatement of its
1996 and 1997 financial statements, and the 1st Quarter report for 1998.
The 1997 balance sheet and the 1998 1st quarter 10-Q should be released on
or before June 15, 1998. The Company felt that releasing the 1998 1st
quarter report, without an audited 1997 balance sheet, would not be in the
best interest of the Company or its shareholders. The Company presently
anticipates it will report on or before June 15, 1998, a significant loss
for the 1998 1st quarter. The Company plans to release its audited 1997
income statement and audited 1996 balance sheet, on or before September 30,
1998.
The Company also informed NASDAQ of its plans for compliance with NASD
Marketplace Rule 4310(c)(14) which stipulates financial reporting
requirements for continued listing on the Nasdaq SmallCap Market. A hearing
on this subject is scheduled for May 28, 1998.
The Company said "Based on discussions with Plante & Moran, LLP, the Company
believes it will be in a position to file an amendment to Form 10-K with
audited financial statements on or before June 15, 1998. The current report
on Form 10-Q should be filed on or before June 15, 1998. Under the
direction of the Audit Committee and the Board of Directors, the Company has
installed additional financial controls, implemented a change in the
recognition of inventory, tightened month-end close procedures, conducted a
review of the accounting software and implemented management reporting
procedures to strengthen the financial statement review process. On May 12,
1998 the Company hired Mr. John Lychos, Chief Financial Officer."
"The Company's difficulties resulted from an accounting system which was
unable to keep pace with the Company's very rapid growth. In 1996, the
Company more than tripled in size through internal growth and two
acquisitions. The Company attempted to use an accounting system of one of
the acquired companies which included an "offline" system with different
revenue tracking practices than those previously used. Integration of these
manual systems with the Company's on-line accounting system, coupled with
the inexperience of the Company's accounting personnel, resulted in problems
leading to accounting irregularities. As noted in the Company's annual
report to the SEC on Form 10-K filed on April 15, 1998, the Company's
independent auditors withdrew their report on the audited financial
statements for the years ended December 31, 1995 and 1996 and the Company's
treasurer and Chief Financial Officer resigned. The Company engaged Plante
& Moran, LLP, independent accountants to perform an audit of the 1997
financial statements and assist in the restatement of prior periods."
Data Systems Network Corporation, through its 20 offices and more than 250
employees, provides computer network services and products that enable the
control of complex distributed computing environments and allow companies to
capitalize on the inherent 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 ("Y2K") consulting.
