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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):
January 29, 1998
TOMORROW'S MORNING, INC.
(Exact name of registrant as specified in its charter)
California 0-29050 95-4379805
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
125 South Barrington Place, Los Angeles, California 90049
(Address of principal executive offices)
(310) 440-2778
(Registrant's telephone number)
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Item 4. Changes in Registrant's Certifying Accountant
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Coopers & Lybrand L.L.P. (the "Former Accountants") resigned as
independent certified public accountants and independent auditors for
Tomorrow's Morning, Inc. (the "Company") on January 29, 1998.
The Former Accountants reported on the Company's financial statements for
the fiscal years ended June 30, 1995, 1996, and 1997 and for the periods from
June 30, 1992 (date of inception) through June 30, 1996 and 1997. The reports
of the Former Accountants on the financial statements for such years and periods
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles; except that
the 1996 opinion included an explanatory paragraph stating that the financial
statements had been prepared assuming that the Company would continue as a going
concern and that the Company had incurred significant operating losses and had
shareholders' and working capital deficiencies that raised substantial doubt
about its ability to continue as a going concern.
During the Company's fiscal year ended June 30, 1995, and through the date
of this report, there were no disagreements with the Former Accountants on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements if not resolved to the
satisfaction of the Former Accountants would have caused them to make reference
thereto in their reports on the financial statements for such years, except for
the Company's presentation on Form 10-QSB/A-2 for the period ended September 30,
1997 of loans receivable from a shareholder as assets rather than as a contra-
equity item (as required by the Former Accountants), to which the Company has
since acquiesced and has filed a further amended Form 10-QSB with respect
thereto. The Former Accountants also requested that the Company's Board of
Directors make an appropriate investigation of the basis for the amendment made
on Form 10-QSB/A-2, as further discussed in the attached letter from the Former
Accountants dated January 28, 1998.
During the fiscal year ended December 31, 1995, and through the date of
this report, the Former Accountants did not advise the Company with respect to
any of the matters described in paragraphs (a) (1) (vi) (B) (1) through (3) of
Item 304 of Regulation S-B.
The Registrant has not yet engaged a successor accounting firm.
The Company has provided the Former Accountants with a copy of the
foregoing disclosures and has requested in writing that the Former Accountants
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
will be filed as an exhibit to this report in accordance with Item 601 of
Regulation S-B.
Item 7. Financial Statements and Exhibits.
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(a) Not applicable.
(b) Not applicable.
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(c) Exhibits. The following exhibits are filed as part of this report:
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16.1 Letter, dated January 30, 1998, from Coopers & Lybrand
L.L.P. to the Securities and Exchange Commission confirming
resignation as the Company's independent accountants.
16.2 Letter, dated January 28, 1998, from Coopers & Lybrand
L.L.P. to the Company's Board of Directors concerning the
amendment on Form 10-QSB/A-2.
16.3 Letter from Coopers & Lybrand L.L.P. to the Securities and
Exchange Commission stating that it has reviewed Item 4 in
the Form 8-K and is in agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
Dated: February 4, 1998 TOMORROW'S MORNING, INC.
By: /s/ Steven Raft
____________________________________
Steven Raft, Chief Financial Officer
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[LETTERHEAD OF COOPERS & LYBRAND]
EXHIBIT 16.1
January 30, 1998
Mr. Steven Raft
Chief Financial Officer
Tomorrow's Morning, Inc.
Los Angeles, CA 90049-3305
Dear Mr. Raft:
This is to confirm that the client-auditor relationship between Tomorrow's
Morning, Inc., (Commission File Number 0-29050) and Coopers & Lybrand L.L.P. has
ceased.
Very truly yours,
/s/ Coopers & Lybrand LLP
Coopers & Lybrand L.L.P.
cc: Office of the Chief Accountant
SECPS Letter File
Securities and Exchange Commission
Mail Stop 11-3
450 Fifth Street, N.W.
Washington, D.C. 20549
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EXHIBIT 16.2
(Letterhead of Coopers & Lybrand L.L.P.)
January 28, 1998
The Board of Directors
Tomorrow's Morning, Inc.
125 South Barrington Place
Los Angeles, CA 90049
Gentlemen:
As agreed in our letter of arrangement with Tomorrow's Morning, Inc., dated July
21, 1997, part of our ongoing services to the Company includes the performance
of preissuance reviews of the Company's quarterly SEC reports. We performed
such a preissuance review of the Company's September 30, 1997 Form 10QSB. As a
result of our review, the Company agreed to make adjustments to its September
30, 1997 financial statements to write off certain software development and
deferred advertising costs. Although the Form 10QSB should not have been filed
prior to the completion of our review, management explained that as a result of
a printer's error, the September 30, 1997 Form 10QSB was filed prior to the
receipt of our comments and, accordingly, it was necessary for the Company to
file an amendment, a Form 10QSB-A ("the Amendment"), in order to reflect the
cost adjustments that we had discussed.
We were recently informed that management of Tomorrow's Morning, Inc. filed,
without our knowledge, a second amendment to its September 30, 1997 Form 10QSB,
a Form 10QSB-A2 ("the Second Amendment"), which changed the financial statement
accounting treatment and disclosure accorded to loans receivable from Adam
Linter, the Company's Chief Executive Officer and one of its major shareholders.
In the Second Amendment, these loans receivable were reclassified from a
deduction from stockholders equity classification to an asset classification.
The effect of this reclassification was to increase the Company's reported
stockholder's equity and to show total equity at an amount in excess of
$1,000,000 which is currently the minimum level required for a company to
maintain a listing for its stock on NASDAQ exchange.
At no time during our preissuance review of the Company's original September 30,
1997 Form 10QSB, or during our discussions of the Amendment, were we consulted
by management on the accounting treatment for the shareholder loans receivable
nor were we told that management believed the loans should be reclassified. In
addition, the aforementioned Second Amendment was filed by management subsequent
to our review of the original Form 10QSB and the Amendment without prior
consultation with us and without our knowledge.
It is our understanding, based on conversations with management, that the NASD
contacted the Company and made inquiries concerning the propriety of the
reclassification of the shareholder loans receivable. As a result of the NASD
inquiries, management informed us that the aforementioned Second Amendment was
filed and has asked us to write a letter to the NASD supporting the
reclassification of the shareholder loans receivable. As discussed more fully
in the following paragraph, we do not agree with the Company's accounting for
the shareholder loans receivable and, accordingly, will not write such a letter.
We received from management an analysis of the Company's rationale for
reclassifying the shareholder loans receivable. We have evaluated the Company's
position and have concluded that the shareholder loans receivable do not qualify
for asset classification pursuant to generally accepted accounting principles.
Accordingly, in our view, the accounting treatment and disclosure accorded to
the shareholder loans receivable in the Second Amendment is inappropriate. We
hereby advise the Board of Directors that the Board should direct management to
immediately prepare and file another amended form 10QSB to correct the erroneous
accounting treatment and disclosure for the shareholder loans receivable. In
addition, the Board should perform an investigation to ascertain the facts
relating to management's decision to file the aforementioned Second Amendment
and should consult with legal counsel in order to determine if the filing of
the Second Amendment constituted an illegal act. If so, legal counsel should be
consulted to advise the Board of the Company's responsibilities for appropriate
remedial actions.
As mentioned previously, an Amended Form 10QSB for September 30, 1997 must be
filed immediately to correct the accounting and disclosure for the shareholder
loans receivable. Please provide us with a copy of the Amended filing for our
review prior to its filing. Also provide us with a copy of the filed document.
Very truly yours,
/s/ Michael J. Dutton
Michael J. Dutton
Partner
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(LETTERHEAD OF COOPERS & LYBRAND L.L.P.)
EXHIBIT 16.3
February 4, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Gentlemen:
We have read the statements made by Tomorrow's Morning, Inc. (copy attached),
which we understand will be filed with the Commission, pursuant to Item 4 of
Form 8-K, as part of the Company's Form 8-K report for the month of February
1998. We agree with the statements concerning our Firm in such Form 8-K.
Very truly yours,
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
