UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
________________
Date of Report (DATE OF EARLIEST EVENT REPORTED) January 12, 2000
ENVIRONMENTAL REMEDIATION HOLDING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Colorado 0-17325 58-2429712
(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
16101 LaGrande Drive, Suite 100
Little Rock, Arkansas 72223
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(501) 821-2222
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
This Amendment No. 1 amends and supplements the Current Report on Form 8-K
filed on January 18, 1997 (the "Resignation 8-K") by Environmental
Remediation Holding Corporation (the "Company") as set forth below.
1. Item 4 in the Resignation 8-K is hereby amended and supplemented
to include the following after the final paragraph thereof:
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
The Company, in accordance with the requirements of Item 304 of
Regulation S-K under the Securities Exchange Act of 1934, as amended,
requested that Durland & Company provide the Company with a letter
addressed to the Commission stating whether it agreed with the statements
made above and if it did not, the respects in which it did not agree. On
January 25, 2000, the Company received such a letter (the "Response
Letter").
It is the Company's position that the Response Letter contains a
number of assertions which are incorrect or misleading, and that the
Respose Letter misrepresents the circumstances surrounding Durland &
Company's resignation.
Prior to the resignation of Durland & Company, the Company was advised
that the SEC had begun an investigation of the Company's past activities.
The SEC advised the Company that it had information tending to show
fraudulent or unlawful actions by the Company's management prior to the
change in control of the Company reported on its Current Report on Form 8-K
filed on August 23, 1999, including, but not limited to: (i) the
falsification of books, records and accounts; (ii) the failure to keep
books, records and accounts which, in reasonable detail, accurately and
fairly reflected its transactions and the acquisition of its assets; and
(iii) the failure to devise and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that transactions were
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets. The Company is cooperating fully with the SEC's
investigation and has provided documentary support as requested. Although
the Company has been advised that the focus of the investigation is actions
taken by the Company prior to the change of control, there is no assurance
that the investigation will not be expanded.
In light of information obtained by the Company with respect to the
SEC investigation, the board of directors of the Company requested the
resignations of board members James Callender and Noreen Wilson (both of
whom were involved in the governance of the Company during the periods that
are the subject of the investigation) and considered the termination of
Durland & Company as the Company's independent accountants. As described
above, the Company's present management is unaware of the Company having
been previously advised by Durland & Company of the inadequacy or
inaccuracy of the financial records that are now the subject of the SEC
investigation, or of the inadequacy of the Company's system of internal
accounting controls. As the Company reported in THE DECEMBER 8-K,
Following the change in control, the Company's new management and the new
board of directors undertook a detailed review of the Company's historical
financial records. This review revealed that such records are, in many
cases, incomplete and inaccurate, even with respect to periods for which
Durland & Company had previously provided audit opinions. Despite the
review, management of the Company (including its new chief financial
officer) has been unable to locate sufficient, competent information with
respect to such periods that could have reasonably served as a basis for
the audit opinions delivered by Durland & Company. As noted above, the
Company's actions during such periods are the current focus of the SEC
investigation. Thus, despite the assertions made by Durland & Company in
the Response Letter, the Company believes that it would have had a
sufficient basis to have dismissed Durland & Company for cause, and that
the December 8-K contained no factual assertion not already known by
Durland & Company and supported by documentation already in its possession.
Durland & Company has attached, as exhibits to the Response Letter,
the letters of resignation received by the Company from James Callender and
Noreen Wilson. It is the Company's position that such letters contain
numerous misrepresentations. As noted above, Mr. Callender's resignation
was requested by the board of directors in light of the SEC investigation.
Mr. Callender did not tender his resignation of his own volition in
response to a "disagreement" with actions taken by the board of directors.
Thus, the premise of his letter, in which he lists "some of the major
reasons" for his resignation, is inaccurate. Additionally, despite their
assertions to the contrary, both Mr. Callender and Ms. Wilson did attend
board meetings and were involved in the governance of the Company following
their appointment to the board.
In the Response Letter, Durland & Company repeatedly claims that the
Company has access to a line of credit (the "Line of Credit") that "has not
been fully utilized." Durland & Company also asserts that it may no longer
rely upon the representations of current management because, among other
reasons, management has not sought to burden the Company with additional
debt that it has no present ability to repay in order to pay the fees of
Durland & Company. In his resignation letter, James Callender similarly
asserts that one of his primary points of "disagreement" with the Company's
management is the Company's failure to attempt to borrow additional funds
to be used in part to pay his back salary.
As reported on the December 8-K, the Company is insolvent, and such
insolvency has resulted in an ongoing default under the Line of Credit.
Additionally, the review of the Company's historical records revealed that
certain representations made by the Company in the documentation governing
the Line of Credit were inaccurate when made. The lender under the Line of
Credit (TC Hydro Carbon, Inc.) has fulfilled its obligations to date, and
is under no obligation to advance the Company additional funds.
Prior to filing the December 8-K, the board of directors therefore
determined that attempting to borrow additional funds from TC Hydro Carbon
or any other party in order to pay alleged creditors such as Durland &
Company and Mr. Callender, given the inability of the Company to repay
amounts already borrowed, was not in the Company's best interests. At such
time, the Company considered a bankruptcy filing but, as reported in the
December 8-K, elected to pursue, to the extent it is financially able to do
so, whatever action is available to secure its rights with respect to its
petroleum development joint venture ("STPETRO") with the Democratic
Republic of Sao Tome and Principe (the "DRSTP"). As reported in the
December 8-K, the Company's rights in STPETRO and under related agreements
with the DRSTP and third parties are its only significant assets, and its
present operations are solely related to its activities with respect to
STPETRO. However, in light of its financial situation, the Company
continues to consider the option of a bankruptcy filing. Should the Company
elect to make such a filing, it expects that it would be made under Chapter
7 of the Bankruptcy Code.
2. The Resignation 8-K is hereby amended and supplemented to include
the following Item 7:
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) EXHIBITS:
16. Letter to the Securities and Exchange Commission from
Durland & Company, CPAs, PA, dated January 25, 2000
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 thereunto duly authorized.
ENVIRONMENTAL REMEDIATION HOLDING
CORPORATION
By: /S/ LAURA KLEBER
Laura Kleber
Treasurer and Chief Financial Officer
Date: January 28, 2000