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
November
11, 2014
Date
of Report (Date of earliest event reported)
American Spectrum Realty, Inc.
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(Exact name of registrant as
specified in its charter)
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Maryland
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001-16785
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52-2258674
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(State or Other Jurisdiction of incorporation)
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(Commission File Number)
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(I.R.S. Employer Identification No.)
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2401 Fountain View, Suite 750, Houston, Texas 77057
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(Address
of principal executive offices)
(Zip Code)
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(713) 706-6200
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(Registrant’s telephone number, including area code)
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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 (see General Instructions A.2.
below):
⃞
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
American Spectrum Realty, Inc. (the “Company”) was notified on November
11, 2014 by its independent registered accountants, EEPB, P.C. (“EEPB”),
that they are declining to stand for re-election after completion of
their audit of the Company’s financial statements as of and for the year
ended December 31, 2013. EEPB cited the Company’s risk profile and the
limitations on their internal resources as the reasons for their
decision.
On October 30, 2014, EEPB issued an unqualified opinion on the Company’s
2013 and 2012 financial statements, which the Company included in its
Annual Report on Form 10-K as filed with the Securities and Exchange
Commission on October 31, 2014. Following their opinion paragraph, EEPB
included an explanatory paragraph indicating that in their opinion,
“[T]he Company has recurring losses from continuing operations and
relative low levels of cash and cash equivalents. These conditions raise
substantial doubt about its ability to continue as a going concern.”
EEPB’s explanatory paragraph contained a reference to Note 3 of the
Company’s financial statements, which included the following:
As of December 31, 2013, the Company had an equity deficit of $11.5
million and cash and cash equivalents of $2.6 million. Debt obligations
that mature and come due in 2014 total $53.7 million. In addition, the
Company has $22.2 million in vendor obligations and other accrued
liabilities. These liquidity concerns create uncertainty about the
Company's ability to meet its ongoing obligations in the normal course
of business without the sale of real estate assets. To generate
additional liquidity for maturing obligations, management has increased
the pace of asset sales in 2014, and expects to continue the process
into 2015.
Subsequent to the date of EEPB’s unqualified opinion on November 7,
2014, EEPB informed the Company’s Audit Committee of certain internal
control deficiencies that were disclosed by the Company in its 2013
Annual Report on Form 10-K within Item 9A - Controls and Procedures.
During the past two fiscal years and the related interim reporting
periods preceding the date of EEPB’s November 11, 2014 notification,
there have been no disagreements with EEPB on any matter of accounting
principles or practices, financial statement disclosure or audit scope
or procedure, which would have caused EEPB to make reference to such
disagreements in connection with its reports.
The Company’s Audit Committee has accepted EEPB’s resignation and is
actively seeking to engage new independent auditors for its 2014 fiscal
year that ends on December 31, 2014.
The Company provided EEPB with a copy of the disclosure made in this
Current Report on Form 8-K and requested that EEPB furnish a letter
addressed to the Securities and Exchange Commission stating whether or
not it agrees with the disclosures. A copy of such letter, dated
November 14, 2014, is filed as Exhibit 16.1 to this report.
Item 8.01. Other Events
On November 14, 2014, American Spectrum Realty, Inc. issued a press
release regarding Item 4.01, described above. A copy of the press
release is filed as Exhibit 99.1 to this report.
Item 9.01. Financial Statements and Exhibits.
(c)
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Exhibits.
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Exhibits.
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Description
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16.1
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EEPB letter to the SEC dated November 14, 2014
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99.1
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Copy of Press Release issued by American Spectrum Realty, Inc. on
November 14, 2014
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SIGNATURES
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.
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AMERICAN SPECTRUM REALTY, INC.
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By:
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/s/ William J. Carden
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William J. Carden
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Chairman of the Board, President
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and Chief Executive Officer
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Date:
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November 14, 2014
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Exhibit 16.1
EEPB, P.C.
CPAs and Business Advisors
2950 North Loop West, Suite 1200
Houston, TX 77092
November 14, 2014
Securities and Exchange Commission
100 F Street N.E.
Washington,
D.C. 20549
We have been furnished with a copy of the response to Item 4.01 of Form
8-K for the event that occurred on November 11, 2014, to be filed by
American Spectrum Realty, Inc. We agree with the statements made in
response to that Item insofar as they relate to our Firm.
Very truly yours,
/s/ EEPB, P.C.
EEPB, P.C.
Exhibit 99.1
American
Spectrum Realty – Resignation of Independent Auditors
HOUSTON--(BUSINESS WIRE)--November 14, 2014--American Spectrum Realty,
Inc. (NYSE/MKT: AQQ) – a real estate investment management and leasing
company – today announced that the Company was notified on November 11,
2014 by its independent registered accountants, EEPB, P.C. (“EEPB”),
that they are declining to stand for re-election after completion of
their audit of the Company’s financial statements as of and for the year
ended December 31, 2013. EEPB cited the Company’s risk profile and the
limitations on their internal resources as the reasons for their
decision.
On October 30, 2014, EEPB issued an unqualified opinion on the Company’s
2013 and 2012 financial statements, which the Company included in its
Annual Report on Form 10-K as filed with the Securities and Exchange
Commission on October 31, 2014. Following their opinion paragraph, EEPB
included an explanatory paragraph indicating that in their opinion,
“[T]he Company has recurring losses from continuing operations and
relative low levels of cash and cash equivalents. These conditions raise
substantial doubt about its ability to continue as a going concern.”
EEPB’s explanatory paragraph contained a reference to Note 3 of the
Company’s financial statements, which included the following:
As of December 31, 2013, the Company had an equity deficit of $11.5
million and cash and cash equivalents of $2.6 million. Debt obligations
that mature and come due in 2014 total $53.7 million. In addition, the
Company has $22.2 million in vendor obligations and other accrued
liabilities. These liquidity concerns create uncertainty about the
Company's ability to meet its ongoing obligations in the normal course
of business without the sale of real estate assets. To generate
additional liquidity for maturing obligations, management has increased
the pace of asset sales in 2014, and expects to continue the process
into 2015.
Subsequent to the date of EEPB’s unqualified opinion on November 7,
2014, EEPB informed the Company’s Audit Committee of certain internal
control deficiencies that were disclosed by the Company in its 2013
Annual Report on Form 10-K within Item 9A - Controls and Procedures.
During the past two fiscal years and the related interim reporting
periods preceding the date of EEPB’s November 11, 2014 notification,
there have been no disagreements with EEPB on any matter of accounting
principles or practices, financial statement disclosure or audit scope
or procedure, which would have caused EEPB to make reference to such
disagreements in connection with its reports.
The Company’s Audit Committee has accepted EEPB’s resignation and is
actively seeking to engage new independent auditors for its 2014 fiscal
year, which ends on December 31, 2014.
ABOUT AMERICAN SPECTRUM REALTY, INC.
American Spectrum Realty, Inc. is a real estate investment company that
owns, through an operating partnership, interests in office, industrial,
retail, self-storage, RV parks, retail, multi-family properties and
undeveloped land throughout the United States. American Spectrum
Management Group, Inc., a wholly-owned subsidiary of the Company,
manages and leases all properties owned by American Spectrum Realty,
Inc. as well as for third-party clients, totaling 9 million square feet
in multiple states. Website: www.asrmanagement.com
FORWARD LOOKING STATEMENTS
Certain matters discussed in this release are forward-looking statements
that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected, including the risks
and uncertainties of acquiring, owning, operating and disposing of real
estate. Such risks and uncertainties are disclosed in the Company's past
and current filings with the U.S. Securities and Exchange Commission.
CONTACT:
American Spectrum Realty, Inc.
James Hurn, (713) 706-6200
General
Counsel
jhurn@americanspectrum.com
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