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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
Date of Report
January 23, 1998
SAFE ALTERNATIVES CORPORATION OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
Florida 000-21627 06-1413994
(State of Incorporation) (Commission File Number) (IRS Employer Id. No.)
27 Governor Street, Ridgefield, Connecticut 06877
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (203) 438-8144
________________________________________________________________________________
(Former name or former address, if changes since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) had been subject to such filing
requirements for the past 90 days.
Yes [ ] No [X]
Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On January 9, 1998, the Board of Directors (the "Board") of Safe Alternatives
Corporation of America, Inc. ("SAC") unanimously voted not to renew the
engagement of Ernst & Young LLP as independent auditors for SAC because of the
significant financial cost which the Company would incur upon such engagement.
The reports of Ernst & Young LLP on SAC's consolidated financial statements for
each of the two years in the period ended December 31, 1996 contained no adverse
opinion or disclaimer of opinion and were not qualified or modified as to
uncertainty, audit scope, or accounting principle, other than the Company's
continuing recurring operating losses and working capital deficiency, which
conditions raise substantial doubts about the Company's ability to continue as a
going concern. This condition is more fully described in Note 1 of the audited
year- end financial statements.
In connection with SAC's two fiscal years ended December 31, 1996 and through
the date of this filing, there were no disagreements ("Disagreements") as
defined in Item 304 (a) (1) (iv) and the Instructions to Item 304 of Regulation
S-K amended ("Regulation S-K"), between SAC and Ernst & Young LLP, on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which Disagreements if not resolved to their
satisfaction would have caused Ernst & Young LLP to make reference thereto in
connection with their report.
In connection with SAC's two fiscal years ended December 31, 1996 and through
the date of this filing, there were no reportable events ("Reportable Events")
as defined in Item 304 (a) (1) (v) of Regulation S-K, except that Ernst & Young
LLP advised SAC that the Company's financial statements at June 30, 1997 and for
the three and six month period then ended required restatement as a result of
the Company's discovery of a material overstatement of revenue for those
periods, and that such overstatement was indicative of an inadequate system of
internal control. The Company was in agreement with and is in the process of
complying with Ernst & Young, LLP's advice. More details of this event is
contained in the following section, Item 5 of this report.
Item 5. OTHER EVENTS
On November 18, 1997, SAC prepared and released the following statement which
was carried on the PR Newswire.
"Safe Alternatives Corporation of America, Inc. (SACA) is re-stating its
10Q for the period ending June 30, 1997 to reduce the amount stated for sales of
its Natural Cool units from $305,448 to $13,121. Total sales for the three-month
quarter ending June 30, 1997 are $35,630 as compared to $327,957 as originally
reported. The overstatement of income was discovered after SACA terminated
Clement Royer as President of its Natural Cool Division for cause. SACA has
engaged local council in the State of Vermont who are proceeding with legal
action against Mr. Royer for fraud and misrepresentation.
After Mr. Royer's termination, SACA was able to secure the manufacturing
rights from the original inventors of Natural Cool. Prior to Mr. Royer's
termination SACA had only the marketing rights through Mr. Royer.
SACA Board of Directors has appointed a committee to thoroughly investigate
Mr. Royer's activities and has put into place additional internal controls to
insure that this type of activity will be detected immediately and will not
occur in the future."
The Company is in the process of restating its June 30, 1997 financial
statements which were previously filed with the Securities and Exchange
Commission on August 13, 1997.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit
16.1 Letter, dated January 23, 1998 from Ernst & Young LLP to the
Securities and Exchange Commission
SIGNATURE
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.
/s/ Richard J. Fricke
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Safe Alternatives Corporation of America
By: Richard J. Fricke
Secretary