UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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): February 2, 2009
UCI MEDICAL AFFILIATES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-13265 59-2225346
(State or Other Jurisdiction of Incorporation) (Commission File Number)(I.R.S. Employer Identification)
4416 Forest Drive, Columbia, South Carolina 29206
(Address, Including Zip Code of Principal Executive Offices)
(803) 782-4278
(Registrant's Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 4.01 Changes in Registrant's Certifying Accountant
On February 2, 2009, the Audit Committee of the Board of Directors (the
"Audit Committee") of UCI Medical Affiliates, Inc. (the "Company") dismissed
Scott McElveen, LLP ("Scott McElveen") as the Company's independent registered
accounting firm. The Audit Committee concurrently authorized, and has initiated,
a search for a new independent registered accounting firm.
As previously announced, on December 10, 2008, the Audit Committee
commenced an internal investigation of certain accounting irregularities with
respect to the Company's internal controls and improper expense reimbursements
to Jerry F. Wells, Jr., the former Executive Vice-President of Finance, Chief
Financial Officer, and Secretary of the Company. The Audit Committee, with the
assistance of outside counsel and forensic accounting experts, continues to
conduct its inquiry concerning the improper expense reimbursements and other
disbursements requested by and processed on Mr. Wells' behalf.
As previously reported under Item 4.02(a) on Form 8-K filed on January
15, 2009 (the "January 8-K"), as a result of the preliminary findings of the
investigation, which is ongoing, the Company concluded that it expects to
restate its audited financial statements for the year ended September 30, 2006
and the interim periods in fiscal year 2006. Accordingly as previously reported
in the January 8-K, the Audit Committee determined that the Company's previously
issued financial statements for the fiscal year ended September 30, 2006 and the
related report of the Company's independent registered accounting firm and the
unaudited condensed consolidated financial statements for each of the fiscal
quarters during such year, should no longer be relied upon. Similarly, related
press releases and reports describing the Company's financial results for the
aforementioned period should no longer be relied upon. Also as previously
disclosed in the January 8-K, the Company is evaluating the impact of the
aforementioned matters on the Company's audited financial statements for each of
the fiscal years ended September 30, 2003 through 2007 and its unaudited
condensed financial statements for each of the fiscal quarters during such years
and the first three fiscal quarters of 2008. Depending on the results of this
evaluation, the Company may also determine that it will restate any or all of
these additional prior period financial statements.
Additionally, as reported in the January 8-K, as a result of these
matters, the Company believes that it has one or more material weaknesses in its
internal control over financial reporting and related deficiencies in its
disclosure controls and procedures. The Company currently believes these
deficiencies relate primarily to internal controls over the authorization of
certain transactions executed by executive management. The Company expects that
in its annual report of management on internal control over financial reporting
to be included in the Company's Form 10-K for the year ended September 30, 2008,
it will conclude that its internal control over financial reporting was not
effective as of September 30, 2008 because of one or more material weaknesses
related to these matters. In conjunction with the investigation and its
findings, the Company currently is undertaking measures to remediate these
weaknesses and deficiencies by designing and implementing new controls, as well
as strengthening existing controls, regarding these matters.
The audit reports of Scott McElveen on the consolidated financial
statements of the Company and subsidiaries as of and for the years ended
September 30, 2005 through 2007 did not contain an adverse opinion or a
disclaimer of opinion, and were not qualified or modified as to uncertainty,
audit scope or accounting principles. Except as described below, during the
fiscal years ended September 30, 2005 through 2007 and subsequent interim
periods through February 2, 2009 there were (1) no disagreements with Scott
McElveen on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of Scott McElveen, would have caused it to make
reference to the subject matter of the disagreement in connection with its
reports and (2) no "reportable events" as defined in Item 304(a)(1)(v) of
Regulation S-K.
In connection with discussions between Scott McElveen, the Company and
representatives of the Audit Committee regarding the preliminary findings and
conclusions of the Audit Committee's investigation team, Scott McElveen advised
that it would likely need to significantly expand the scope of its audit to
confirm whether it would agree with the ultimate findings and conclusions of the
investigation. The Company, in consultation with representatives of the Audit
Committee and its investigation team, expressed a difference of opinion with
Scott McElveen regarding the necessity of some of the additional testing and
procedures Scott McElveen had proposed to perform as part of the expanded scope
of its audit. However, this difference of opinion was not a decisive factor, in
the view of the Audit Committee, in its determination to dismiss Scott McElveen.
Instead, the Audit Committee concluded, after consideration of numerous factors,
that it was in the best interest of the Company and its stockholders to engage a
new independent registered public accounting firm. The Company has authorized
Scott McElveen to respond fully to the inquiries of the successor auditor
concerning any possible disagreement between Scott McElveen and the Company or
reportable event in this regard.
The Company furnished a copy of this Form 8-K to Scott McElveen and
requested that Scott McElveen furnish it a letter addressed to the Securities
and Exchange Commission stating whether it agrees with the statements made by
the Company in this Current Report on Form 8-K and, if not, stating the respects
in which it does not agree. A copy of the letter furnished in response to that
request is filed as Exhibit 16.1 hereto.
Item 7.01 Regulation FD Disclosure
Because the investigation is not yet concluded and because of the
additional work the Company and its successor auditors will need to perform in
connection with the audit of its fiscal year 2008 financial statements, the
Company expects to be unable to file its Form 10-K for the year-ended September
30, 2008 ("2008 Form 10-K") before the conclusion of the 30-day grace period
provided in Financial Industry Regulatory Authority ("FINRA") Rule 6530. As a
result, it is anticipated that on or about February 13, 2009, the Company shall
receive from FINRA a notice that the common stock of the Company, on or about
seven days after the date of such notice, shall be ineligible for quotation on
the OTC bulletin board until such time as the Company has filed with the
Securities and Exchange Commission all reports pursuant to Section 13 of the
Securities and Exchange Act of 1934, as amended. Although the Company cannot at
this time estimate when it will be in a position to file its restated financial
statements and its 2008 Form 10-K, it is diligently pursuing these matters and
intends to make the filings as soon as reasonably practicable after the
conclusion of the investigation and completion of work regarding its restated
financial statements and 2008 Form 10-K.
Item 9.01 Financial Statements and Exhibits.
(a) - (c) Not applicable.
(d) Exhibits.
Exhibit 16.1 Letter from Scott McElveen, LLP, dated February 6, 2009.
Advisory Note Regarding Forward-Looking Statements
Certain of the statements contained in this Report on Form 8-K are
forward-looking statements subject to the safe harbor created by the Private
Securities Litigation Reform Act of 1995. We caution readers of this Form 8-K
that such forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause actual results to materially
differ from our current expectations or any results expressed or implied by such
forward-looking statements. Specifically, our statements in this Form 8-K
regarding the status, preliminary indications and ongoing nature of the internal
investigation, and our expectations regarding the financial statements that we
intend to restate or may restate, as well as any estimated amounts and impact of
potential adjustments in any restated financial statements are forward-looking
statements. Factors that could cause actual results to differ from current
expectations include, among other things, additional developments in and
findings of the ongoing investigation, the possible impact of such developments,
factors that may affect the timing of and ability to complete the investigation
and the time needed for the Company, its counsel and outside auditors to review
these matters, any matters arising from the review and preparation of
adjustments to our previously issued financial statements and the impact of all
such matters on reports filed or to be filed with the Securities and Exchange
Commission. These possible impacts include, but are not limited to, the
following: damage to our business or reputation; the discovery of items that
require additional or greater than expected adjustment to, or restatement of,
our historical financial statements; impairment of our ability to prepare and
timely file with the Securities and Exchange Commission our future financial
reports; possible litigation or regulatory action; the delisting and
ineligibility of our common stock for further listing and quotation on the OTC
Bulletin Board; or ancillary impacts on our relationships or agreements with
employees, vendors, lenders or other constituencies important to our business.
We can give no assurance that one or more of these impacts, or other unexpected
effects, may result from the internal investigation or expected restatement of
our historical financial statements, any one of which could materially and
adversely affect our business, results of operations, financial condition, or
trading price of our common stock. Other risks we face are described in the
Company's annual report on Form 10-K for the year-ended September 30, 2007 and
in other reports we file with or furnish to the Securities and Exchange
Commission from time to time.
SIGNATURES
Pursuant to requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
UCI MEDICAL AFFILIATES, INC.
By: /s/ Joseph A. Boyle, CPA
Joseph A. Boyle, CPA
Title: Chief Financial Officer
Date: February 6, 2009