SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 10 or 15(d) of the
Securities Exchange Act of 1934
JUNE 11, 1997
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Date of Report (date of earliest event reported)
TOUCH TONE AMERICA, INC.
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(Exact Name of Registrant as Specified in its Charter)
CALIFORNIA 0-24058 33-0424087
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(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
4110 N. SCOTTSDALE ROAD
SUITE 170
SCOTTSDALE, ARIZONA 85251
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(Address of Principal Executive Offices
Including Zip Code)
(800) 535-2211
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(Registrant's telephone number,
including area code)
Page 1 of 7.
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Item 1. Changes in Control of Registrant
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N/A
Item 2. Acquisition or Disposition of Assets
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N/A
Item 3. Bankruptcy or Receivership
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N/A
Item 4. Changes in Registrant's Certifying Accountants
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(a) SECTION 304(a)(1):
(i) On May 28, 1997, Touch Tone America, Inc. (the
"Company") was informed by the accounting firm of Hein +
Associates LLP, Denver, Colorado, who have acted as
certifying accountants for the Company for the years ending
May 31, 1996 and 1995 that it was resigning as the Company's
auditors effective as of that date.
(ii) None of the prior certifying accountants' reports on
the Company's financial statements for the past two years
contained an adverse opinion or disclaimer of opinion, or
was modified as to audit scope or accounting principle.
Their report, however, included an explanatory paragraph
regarding the uncertainty as to the Company's ability to
continue its operations as a going concern.
(iii) The resignation of Hein + Associates LLP was
presented to the Company's Board of Directors on May 28,
1997.
(iv) For the fiscal years ended May 31, 1996 and 1995 and
through the date of this Form 8-K the Company is unaware of
any disagreement with Hein + Associates LLP on any matter of
accounting principle or practice, financial statement
disclosure, or auditing scope or procedure which if not
resolved to Hein + Associates LLP's satisfaction, would have
caused said accountants to make reference to the subject
matter in connection with any report issued by same except
that in April 1996, Mr. Vaughan, the Company's former
Chairman of the Board and Chief Executive Officer, brought
to the attention of the Company's auditors a previously
undisclosed letter agreement signed by Mr. Miller (the
Company's former President and Director), with a significant
sales agent, which provided for a retroactive increase in
the sales agents' commissions to 50% from 32%.
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This agreement and its potential ramifications was
thoroughly reviewed by the Company's Board of Directors with
Hein + Associates LLP. Hein + Associates LLP advised the
Board that unless the occurrence was corrected it was
unwilling to rely on management's representations. The
following actions were taken on behalf of the Company.
The Board of Directors, with the concurrence and support of
Messrs. Miller and Vaughan, determined it appropriate to
bring in an experienced manager to institute tighter
controls in the areas of finance, overhead, carrier
commitments and corporate governance. Accordingly, in April
1996, Mr. Michael Canney was appointed President, Chairman
of the Board and Chief Executive Officer. Mr. Miller
resigned as a Director and Officer and elected to pursue
personal business interests. Mr. Vaughan also resigned as
Director and Officer, however, remained as a consultant to
the Company.
The Company also obtained an updated agreement with the
sales agent which substantially reaffirmed the Company's
prior sales commission arrangement with the sales agent.
(b) SECTION 304(a):
(2) As of the date of this Report, the Company has not
engaged a new accounting firm to act as certifying
accountants for the year ending May 31, 1997.
(3) Not applicable, see Item 4 of this Report.
Item 5. Other Events
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In May 1997, the Company entered into a consulting agreement with
Cornwell Consulting Services, Inc. ("Cornwell") of Dover,
Florida. Cornwell was retained by the Board of Directors to
assist in finding a merger candidate, the sale of its wholly-owned
subsidiary, Getnet International, Inc., and to institute
cost cutting measures. The Board of Directors felt that drastic
measures where called for as the Company's cash continues to
deteriorate, losses from operations have continued, past due
taxes are due and owing, the Company is a party to numerous
lawsuits and continues to experience shortfalls on its carrier
commitments.
To facilitate the attempted turnaround and provide Cornwell with
the necessary power to take drastic measures, Board members Matt
Barletta and Michael J. Canney, resigned and Robert C. Vaughan,
Larry C. Cornwell and Dr. Edward D. Wirth, Jr. were appointed as
Directors. Mr. Vaughan resigned on June 6, 1997, leaving Messrs.
Cornwell, Wirth and Walko as the Company's remaining
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Directors. Mr. Cornwell is the interim President and David J.
Smith remains as Secretary.
Cornwell believes that the future existence of the Company is
uncertain unless the Company can raise operating capital through
the sale of assets or debt/equity financing. Accordingly, both
of these areas have been given the top priority by the new
management.
Item 6. Resignations of Registrant's Directors
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N/A
Item 7. Financial Statements and Exhibits
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(a) and (b) N/A
(c) Exhibits: Filed herewith pursuant to Reg. S-K Item 601
is the following exhibit.
Exhibit No. Page Description
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24.1 6 Letter from Hein + Associates LLP*
24.2 7 Letter from Hein + Associates LLP
* previously filed
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SIGNATURES
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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.
TOUCH TONE AMERICA, INC.
Dated: June 27, 1997 By: /s/ DAVID J. SMITH
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David J. Smith
Chief Financial Officer
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EXHIBIT 24.2
[LETTERHEAD]
June 27, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: TOUCH TONE AMERICA, INC. #0-24058
Dear Sirs:
We have read Item 4 of Touch Tone America, Inc. Form 8-K/A, dated
June 11, 1997, and are in agreement with the statements contained in
paragraphs 4(a)(i), (ii) and (iv) therein as they relate to us.
Very truly yours,
/s/ HEIN + ASSOCIATES LLP
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HEIN + ASSOCIATES LLP
Certified Public Accountants
