SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 9, 1999
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Room Plus
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(Exact Name of Registrant as Specified in Charter)
New York 1-14478 11-2622051
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
91 Michigan Avenue, Paterson, New Jersey 07503
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (973) 523-4600
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Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit Number Description
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16.1 Letter from Andersen to the Securities and
Exchange Commission, dated January 25, 1999
(previously filed)
16.2 Letter from Ehrenkrantz to the Securities and
Exchange Commission (filed herewith)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
ROOM PLUS, INC.
By: /s/ Jay H. Goldberg
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Name: Jay H. Goldberg
Title: Chief Financial Officer
Date: February 9, 1999
2
February 9, 1999
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20548
Re: Room Plus, Inc.
Ladies and Gentlemen:
Reference is made to the letter dated January 26, 1999 addressed
to Ehrenkrantz Sterling & Co., LLC (this "Firm") by Room Plus, Inc. (the
"Company") in which this Firm was formally advised that the Company determined
to replace this Firm as its independent accountants.
With the referenced letter was an accompanying current Report on Form
8-K on behalf of the Company which referred to the change of accountants as an
event occurring on January 19, 1999 (the "Report"). Although the Report
accompanying the referenced letter was not marked as a draft, this Firm believes
that the Report received was a draft. This Firm is uncertain whether any changes
were made in the Report as filed thereafter by the Company.
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Item 4 of the Report refers to the replacement of this Firm as the
independent accountants to audit the Company's financial statements. With
respect to the descriptions set forth in Item 4 of the referenced Report, we
call your attention to the following:
1. During the course of informal review of the Company's preliminary
unaudited financial statements for the three months, the six months and nine
months ended March 31, 1998, June 30, 1998 and September 30, 1998, this Firm
raised questions concerning the gross profit of the Company for the respective
periods. Components affecting the calculations of the gross profit would include
(but would not be limited to) inventory and customer deposits. With respect to
the statement for the three months and nine months ended September 30, 1998, we
understand that the Company conducted an internal inquiry concerning gross
profit and its constituent items of inventory and customer deposits, made
changes in the proposed report on Form 10-QSB as initially furnished to this
Firm, and thereafter filed the Report.
<PAGE>
2. During the course of a discussion among members of this Firm and
representatives of the Company in early December, this Firm indicated that there
were concerns relating to certain internal controls with respect to which this
Firm wished to make a presentation to the Audit Committee of the Board of
Directors of the Company. Between the time of that discussion and the receipt of
the referenced letter, the Audit Committee of the Board of Directors was not
made available to this Firm. Accordingly, the presentation of the internal
control concerns was not presented to the Audit Committee.
Prior to the discussion in December, this Firm advised the Company
in connection with prior audits, as well as the recent subsequent interim
periods, of certain concerns relating to internal control necessary to develop
reliable financial statements.
This Firm has been required to perform expanded audit procedures for
the two most recent fiscal years.
3. We disagree with the reference in the Report that management of
the Company could reasonably determine that a different auditor would have a
"greater expertise" in auditing the financial statements of the Company, as well
as advising the Company with respect to internal accounting systems and
controls.
This Firm is a member of the SEC Practice Section of the AICPA and
is peer reviewed in accordance with standards promulgated by the Peer Review
Committee of the SEC Practice Section of the AICPA. These standards consider the
quality control standards for an auditing and accounting practice. The Firm has
continually received reports indicating the meeting of the requirements of
quality control standards for an accounting and auditing practice and have
conformed with professional standards established by the AICPA. The Firm has
been in conformity with membership requirements of the SEC Practice Section in
all material respects.
As such, this Firm's audit and accounting practice is on the same
professional level as the Company's new independent accountants.
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Although this letter is addressed to the Commission, we are
submitting this letter to the Company with the understanding that the Company
will furnish a copy of this letter to the Commission as an exhibit to the
Report.
Very truly yours,
/s/ Ehrenkrantz Sterling & Co., L.L.C.
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EHRENKRANTZ STERLING & CO., L.L.C.
Certified Public Accountants
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