UNITED STATES
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 (Date of earliest event reported): April 1, 2004
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SANDSTON CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 0-21142 38-2483796
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
40950 Woodward Avenue, Suite 304, Bloomfield Hills, Michigan 48304
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (248) 723-3010
Nematron Corporation
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(Former name or former address, if changed since last report)
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
Following the sale of substantially all of Nematron Corporation's
assets and liabilities to NC Acquisition Corporation at the close of business on
April 1, 2004, the five-for-one reverse stock split of the Registrant's common
stock effective at the opening of business on April 1, 2004, and the re-naming
of the Registrant to Sandston Corporation on April 1, 2004, Grant Thornton LLP
("Grant Thornton") informed the Registrant's Audit Committee on April 1, 2004
that it will decline to stand for reelection as the Registrant's independent
auditors after completion of the review of the Registrant's Form 10-QSB for the
quarter ended March 31, 2004. The Registrant has not begun the process of
selecting new independent accountants.
The auditors' reports on the Registrant's financial statements for each
of the two most recent years were modified as to uncertainty of the Registrant's
ability to continue as a going concern. Each of the auditors' reports referenced
Note 2 to the consolidated financial statements noting that the Registrant had
suffered recurring losses from operations, has a deficit in working capital, has
experienced cash flow difficulties and is in default with certain covenants
contained in financing agreements with its lenders.
During the Registrant's two most recent years and the subsequent
interim period through April 1, 2004, (i) there were no disagreements between
the Registrant and Grant Thornton on any matter of accounting principles or
practices, financial statement disclosures or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Grant Thornton would have
caused Grant Thornton to make reference thereto in their report on the financial
statements for such fiscal years, and (ii) there were no reportable events as
defined in Regulation S-K Item 304 (a)(1)(v), except as follows:
In connection with its audit of the
Registrant's consolidated financial statements for the
year ended December 31, 2003, Grant Thornton, the
Registrant's independent accountants, advised the Audit
Committee and management of a deficiency involving
internal control that Grant Thornton considered to be a
reportable condition under standards established by the
American Institute of Certified Public Accountants.
Grant Thornton reported that during 2003 an error was
made in the application of Emerging Issues Task Force
Consensus 00-27, "Application of Issue No. 98-5 to
certain Convertible Instruments" ("EITF 00-27") in the
determination of the value of the beneficial conversion
features connected with the issuance of convertible
securities with detachable warrants, which resulted in
an audit adjustment increasing interest expense and
common stock by $286,498. This is a complex area of
accounting involving the computation of intrinsic values
inherent in relative values of the instruments.
The Registrant has authorized Grant Thornton to fully respond to the
inquiries, if any, of the Registrant's successor accountants concerning this
matter. Registrant has provided Grant Thornton with a copy of the above
disclosures which the Registrant is making in response to Item 304(a) of
Regulation S-K and has requested that Grant Thornton furnish it with a letter
addressed to the Securities and Exchange Commission stating whether or not it
agrees with such disclosures. A copy of such letter dated April 7, 2004 is filed
as Exhibit 16 to this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 16 Letter from Grant Thornton LLP dated April 7, 2004
SIGNATURES
Pursuant to the 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 hereby duly authorized.
April 7, 2004 Sandston Corporation
/s/ Daniel J. Dorman
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By: Daniel J. Dorman,
President and CEO
EXHIBIT INDEX
Exhibit 16 Letter from Grant Thornton LLP dated April 7, 2004