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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Under Section13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (date of earliest event reported): March 14, 2000
Commission File Number: 1-14072
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Pen Interconnect, Inc.
(Exact Name of Registrant as Specified in its Charter)
Utah 87-0430260
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(State or other jurisdiction of (IRS Employer
Incorporation or organization) Identification No)
1601 Alton Parkway
Irvine, CA 92606
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(Address of Principal Executive Off(Zip Code)
Registrant's Telephone Number, Including Area Code;
949-798-5881
(Former name, former address, and formal fiscal year, if changed since last
report)
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Page 1 of 5 consecutively numbered pages, including exhibits.
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Item 4, Changes in Registrant's Certifying Accountant
a) At its board meeting on March 7, 2000, the Board of Directors of Pen
Interconnect, Inc. engaged the accounting firm of Berg & Company as
independent accountants for the Registrant for fiscal year 2000. The
appointment is subject to the approval of shareholders and notice of
cessation of the client- auditor relationship between the Company and Grant
Thornton LLP. The Company's reason for the replacement is pursuant to an
understanding reached with Grant Thornton LLP that continuing and existing
costs for all experts engaged by the Company need to be reduced and
although there exists no dispute whatsoever concerning billing or charges
of Grant Thornton LLP rendered to the Company, the charges for continuing
auditing and accounting services in future years is anticipated to be
reduced by the engagement of Berg & Company. The Company believes that the
change of certifying accountants shall not, in any respect, alter or amend
financial statements of the Company previously audited by Grant Thornton
LLP.
b) During the two most recent years and interim period subsequent to September
30, 1999, there have been no disagreements with Grant Thornton LLP on any
matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure or any reportable event.
c) Grant Thornton's report on the financial statements as of September 30,
1999 and 1998 and for each of the years then ended contained no adverse
opinion, disclaimer of opinion, nor were its reports qualified or modified
as to uncertainty, audit scope or accounting principles, other than Grant
Thornton LLP included an explanatory paragraph in both the 1999 and 1998
reports wherein they noted that there were certain factors that raised "
substantial doubt about the Company's ability to continue as a going
concern."
d) The Registrant has requested that Grant Thornto LLP furnish it with a
letter addressed to the SEC stating whether it agrees with the above
statements. A copy of Grant Thornton's letter to the SEC, dated March 17,
2000, is filed as Exhibit 16 to the Form 8-K.
e) New Independent Accountants. During the most recent fiscal year, the
Company had not consulted with Berg & Company regarding either: (i) the
application of accounting principles to a specific transaction, either
completed or proposed, or the type of audit opinion that might be rendered
on the Company's financial statements, and neither a written report was
provided to the Registrant nor oral advice was provided that Berg & Company
concluded was an important factor considered by the Registrant in reaching
a decision as to an accounting, auditing or financial reporting issue; or
(ii) any matter that was either the subject of a disagreement, as the term
is defined in Item 304 (a) (1) (iv) of Regulation S-K and the related
instructions to Item 304 of Regulation S-K, or a reportable event, as that
term is defined in Item 304 (a) (1) (v) of Regulation S-K.
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Item 5 Other Matters
The Company sold a majority of its assets of its InCirT Division to the
Company's asset based lender, Finova Capital, which immediately resold the
assets to Comtel Holdings' ADTI subsidiary of Tustin, CA. Remaining assets of
Pen Interconnect and its InCirT Division are in process of being sold to Finova,
under terms outlined in the Company's secured loan program with Finova.
The transaction is in accord with previous announcements made by Pen
Interconnect concerning its intention to sell or permit a bank structured sale
of the assets of the Company and to redirect Pen Interconnect into an
acquisition or merger with a company in a new technology. Effective with this
restructuring, InCirT ceased operations under Pen Interconnect. InCirT was an
electronic contract manufacturer.
In accordance with FASB 15 and FASB 91 the sale of the assets will be accounted
for as a debt restructuring in which the assets transferred and the
corresponding direct reduction of the bank loan will be done at fair market
value and any gain or loss on transfer will be recognized at the time of
transfer. Should the fair market value settlement be insufficient to fully
offset Finova's loan, the Company will recognize the remaining loan obligation
to Finova.
Item 6: 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; thereunto duly authorized, in Irvine, State of California, on March
17, 2000.
By:_________________________
Stephen J. Fryer
President and CEO
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The following exhibits are included as part of this report
SEC
Exhibit Reference
Number Number Title of Document
1.01 16 Letter from Grant Thornton LLP........Page 5
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Exhibit 1.01
March 17, 2000
Securities and Exchange Commission
Washington, D.C. 20549
Re: Pen Interconnect, Inc.
File No. 1-14072
Dear Sir or Madam:
We have read Item 4 of the Form 8-K of Pen Interconnect, Inc. dated March 17,
2000 and agree with the statements contained therein, except for the matters in
the first paragraph (a), relating to the appointment of new auditors and the
anticipated reduction in charges for continuing auditing and accounting services
in future years, and the last paragraph (e), relating to consultations with the
new auditors, about which we have no knowledge.
Very truly yours,
/s/ Grant Thornton LLP
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