Securities and Exchange Commission
Washington, DC 20549
Form 8-K/A
(Amendment No. 3)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) August 9, 2006
ASTRALIS LTD.
(Exact Name of Registrant as Specified in its Charter)
Delaware 000-30997 84-1508866
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(State or Other (Commission (IRS Employer
Jurisdiction of Incorporation) File Number) Identification No.)
75 Passaic Avenue, Fairfield, New Jersey 07004
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (973) 227-7168
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(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 (see General Instruction A.2.)
|_| 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 August 9, 2006 the Audit Committee of the Board of Directors of Astralis Ltd.
("Astralis") dismissed LJ Soldinger Associates, LLC ("Soldinger"), the
independent registered public accounting firm for Astralis and retained Malone &
Bailey, P.C ("Malone & Bailey"), as the independent registered public accounting
firm for Astralis. Soldinger was notified of this decision on August 9, 2006.
Astralis provided Soldinger with a copy of its Current Report on Form 8-K prior
to its filing with the Securities and Exchange Commission, and requested that
Soldinger furnish Astralis with a letter addressed to the Securities and
Exchange Commission stating whether it agrees with the statements made in the
Current Report on Form 8-K filed on August 18, 2006 and amended on August 25,
2006, and if not, stating the aspects with which it does not agree. On August
29, 2006, Astralis received a copy of a letter from Soldinger addressed to the
Securities and Exchange Commission indicating that it did not agree with the
statement that there were "no disagreements" between Soldinger and Astralis,
which had been set forth in the Current Report filed by Astralis.
Astralis amends its Current Report on Form 8-K, filed with the Commission on
August 18, 2006, as amended on August 25, 2006 and September 9, 2006 to disclose
certain disagreements between Astralis and Soldinger. In each instance, the
audit committee, members of management and Soldinger discussed each disagreement
and resolved such disagreements to Soldinger's satisfaction prior to filing its
Annual Reports on 10-KSB or Quarterly Reports on 10-QSB. Astralis is not aware
of, and Soldinger has not suggested that there is, or ever was any disagreement
with respect to the information included in any such reports that were filed
with the Securities and Exchange Commission.
The disagreements between Astralis and Soldinger were as follows:
1. In connection with the audit of the Astralis 2004 financial
statements Soldinger and members of management informed the audit
committee that under SFAS 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets" ("SFAS 144") Astralis was required to
recognize an impairment of its technology access option fee, a
finite lived intangible asset. The initial position of Astralis'
audit committee was that no impairment was necessary. Management
reviewed, tested and proved the audit committee's position.
Subsequently, the circumstances of the drug development program
changed. In light of these changed circumstances, management and the
audit committee agreed that recognition of an impairment was
necessary and recorded an impairment in the amount of $2,797,612 as
of December 31, 2004.
2. In connection with the audit of the Astralis 2005 financial
statements, Soldinger notified Astralis' management that it needed
to account for its obligation for penalties that may result from
registration rights agreements that Astralis had previously entered
into with Blue Cedar Limited ("Blue Cedar"). Management agreed with
Soldinger but explained to Soldinger that the penalty had not been
recognized previously because there was a verbal agreement between
Astralis and Blue Cedar's representative to waive the penalty.
Subsequently, when the formal waiver from Blue Cedar was not
received, Astralis' management accounted for these registration
rights penalties and determined a liability value which Astralis
recorded in the 2005 financial statements. Despite management
believing that it was in agreement with Soldinger and that the
Company was simply waiting for a written confirmation of a verbal
agreement, Soldinger has written in its letter that it disagreed
with Astralis' initial value of the registration rights penalty it
planned to record as of March 31, 2006 and certain of the underlying
assumptions used in the calculation.
3. In connection with the audit of the Astralis 2005 financial
statements and Soldinger's SAS 100 review of the Astralis financial
statements for first calendar quarter of 2006, Soldinger identified
certain errors in the financial statements that were not initially
identified by Astralis' internal control over financial reporting.
Soldinger communicated these items to the audit committee and
management. Astralis' management maintained that it had effective
disclosure controls and procedures but conceded that internal
controls needed to be improved. Due to, among other things, further
discussions among Astralis' management, audit committee and
Soldinger, the filing deadline was missed. Because the SEC filing
was submitted after the filing deadline, management disclosed in its
Form 10-KSB Annual Report and its Form 10-QSB Quarterly Report for
the first quarter of 2006 that Astralis' disclosure controls were
ineffective and that internal controls needed improvement.
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.
ASTRALIS LTD.
Date: September 28, 2006 By: /s/ Michael Garone
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Michael Garone
Chief Financial Officer and
Interim President