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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
May 7, 1997
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Date of Report (Date of Earliest Event Reported)
Kaye Kotts Associates, Inc.
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(Exact name of Registrant as specified in its charter)
Delaware 001-14190 95-4248310
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(State or other (Commission (IRS Employer
jurisdiction of file Number) Identification No.)
incorporation or
organization)
15490 Ventura Boulevard
Suite 225
Sherman Oaks, California 91403
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(Address of principal executive offices)
Registrant's telephone number, including area code: (818) 382-6300
with copies to:
Jeffrey P. Berg, Esq.
Matthias & Berg LLP
1990 South Bundy Drive
Suite 790
Los Angeles, California 90025
Tel: 310-820-0083
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ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
On July 10, 1997, Kaye Kotts Associates, Inc. (the "Company") filed a
voluntary petition for protection under Chapter 11 of the United States
Bankruptcy Code. Under this filing, the Company's officers continue in control
as Debtor-in-Possession under the jurisdiction of the United States Bankruptcy
Court for the Central District of California (Los Angeles). The Company's case
number is SV97-19494 GM. There has been no receiver or trustee appointed as of
the date of this Report.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
By letter dated June 5, 1997, Feldman Radin & Co., P.C. ("Feldman
Radin") resigned as independent certified accountants for the Company.
The reason stated for such resignation was that Feldman Radin had been
named as a co-defendant with the Company in certain litigation relating to the
Company's initial public offering in February, 1996, and that because such
action alleges wrongdoing on the part of Feldman Radin in rendering professional
services to the Company, Feldman Radin determined that, under the standards of
its profession, Feldman Radin's independence may be deemed to be impaired. See
"Item 5 - Other Events."
The Company's former independent certified accountants' annual report
covering the two (2) years ended December 31, 1996 and 1995, included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996,
contained a qualification based on the Company's ability to continue as a going
concern. Except for this qualification, the Company's former independent
certified accountant's report did not include an adverse opinion or disclaimer
of opinion, and was not modified as to uncertainty, audit scope or accounting
principles. In connection with the audits of the two (2) most recent fiscal
years and during any subsequent interim periods preceding such resignation,
there has not developed any disagreement between the former independent
certified accountants and management of the Company or other reportable events
which have not been resolved to the Company's former independent certified
accountant's satisfaction.
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ITEM 5. OTHER EVENTS.
On May 7, 1997, a complaint (the "Complaint") was filed against the
Company and J.W. Barclay & Co., Inc., First Cambridge Securities Corp., Feldman
Radin Feinsod & Co., P.C., and certain current and former officers and directors
of the Company, including David Kaye, Linda Kaye, Michael M. Kesner, Susan E.
Phillips, Robert M. Rubin and Lawrence Cohen in the United States District Court
for the Southern District of New York (97 Civ. 3375). The Complaint is styled as
a class action brought on behalf on Lincoln Adair and all other persons or
entities, except for defendants, who bought the Company's Common Stock and Class
A Common Stock Purchase Warrants during the period February 22, 1996 through
April 15, 1997. The Complaint alleges violations of Sections 11 and 12(2) of the
Securities Act of 1933, as amended, and Section 10(b) of the Securities Exchange
Act of 1934, as amended, arising out of an initial public offering (the
"Offering") of 1,000,000 shares of the Company's Common Stock at $5.00 per share
and 1,100,000 Redeemable Class A Common Stock Purchase Warrants at $0.15 per
warrant pursuant to a Registration Statement and Prospectus dated February 22,
1996. The Complaint alleges a failure to disclose the Company's true financial
condition in the Registration Statement in connection with the Offering and
seeks money damages from the Company, certain current and former officers and
directors of the Company, the underwriters of the Offering and an accounting
firm which audited certain of the Company's financial statements, which
financial statements were included in the Registration Statement.
Management of the Company, and the officers and directors named as
defendants, believe that there are valid defenses to each of the claims asserted
in the Complaint, and intend to vigorously defend this action.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS.
16.1 Letter re Change in Certifying Accountant of Feldman Radin & Co.,
P.C. dated July 21, 1997.
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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 authorized.
KAYE KOTTS ASSOCIATES, INC.
Dated: July 22, 1997 By: /s/ DAVID KAYE
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David Kaye
Chief Executive Officer
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EXHIBIT 16.1
July 21, 1997
Securities and Exchange Commission
Office of the Chief Accountant
Washington, D.C. 20549
Gentlemen:
We have read Item 4 of Form 8-K dated July 22, 1997 of Kaye Kotts
Associates, Inc. and agree with such statement.
Very truly yours,
Feldman Radin & Co., P.C.
Certified Public Accountants
