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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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CURRENT REPORT
ON
FORM 8-K/A
PURSUANT TO SECTION 13 OR 15(D)
OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (date of earliest event reported): February 13, 1998
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THINK NEW IDEAS, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 000-21775 95-4578104
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification No.)
incorporation)
45 W. 36TH STREET, 12TH FLOOR, NEW YORK, NEW YORK 10018
(Address of principal executive offices)
(212) 629-6800/(212) 629-6850 (FACSIMILE)
(Registrant's telephone and facsimile numbers, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not Applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANTS
Effective February 13, 1998, THINK New Ideas, Inc. (the "Company")
dismissed the accounting firm of BDO Seidman, LLP ("BDO Seidman"), 330 Madison
Avenue, New York, New York 10017, as the Company's independent accountants.
The report of BDO Seidman on the financial statements of the Company for
the fiscal years ended June 30, 1996 and 1997 did not contain an adverse opinion
or a disclaimer of opinion and was not qualified or modified as to uncertainty,
audit scope, or accounting principles.
The decision to change accountants was approved by the Board of Directors.
There were no disagreements at the decision making level (i.e., between
personnel of the Company responsible for the presentation of its financial
statements and personnel of BDO Seidman responsible for rendering its report)
with BDO Seidman 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 BDO Seidman, would have caused it to make
reference to the subject matter of such disagreements in connection with its
reports. In addition, there is no information or event required to be reported
herein pursuant to Subsection (a)(1)(iv)(B) of Rule 304 of Regulation S-B,
except for certain potential material weaknesses which our auditors have advised
us of in a draft management letter dated January 6, 1998, relating to their
audit of the Company's June 30, 1997 financial statements. Management believes
the following points have been remedied as part of the further development of
the Company's infrastructure. The points included: (i) general ledger
maintenance and account reconciliations were not performed on a timely basis,
including reconciliations of a certain subsidiary of subledgers to general
ledger control accounts (in particular, unbilled accounts receivable, certain
intercompany accounts and work-in process accounts were not currently analyzed
and reconciled); (ii) there was no formal job cost system in place to track the
status of web-site development projects and the related percentage of completion
information, (iii) certain invoices had not been submitted to clients on a
timely basis, and (iv) there was no formal written policy regarding the
processing and payment of vendor invoices and employee expense reimbursements.
Some of these areas resulted in the performance of additional procedures during
the course of the audit and certain material year-end audit adjustments.
Management believes that it has addressed and satisfactorily resolved the
foregoing matters during the first quarter of the new fiscal year. In addition,
management has submitted the draft letter received from BDO Seidman to Ernst &
Young for its review and consideration.
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The Company provided BDO Seidman with a copy of this Current Report on
Form 8-K (the "Current Report") and requested that BDO Seidman furnish the
Company with a letter addressed to the Securities and Exchange Commission (the
"Commission") stating whether BDO Seidman agrees with the statements made by the
Company hereinabove and, if not, stating the respects in which it does not
agree. A copy of the letter of BDO Seidman is included herewith as Exhibit 16.1.
The Board of Directors has engaged Ernst & Young, LLP, 787 7th Avenue, 9th
Floor, New York, New York 10019, ("Ernst & Young") as the Company's independent
accountants, effective as of February 13, 1998. During the fiscal years ended
June 30, 1996 and 1997, the Company did not consult with Ernst & Young
regarding: (i) the application of accounting principles to a specified
transaction; (ii) the type of opinion that might be rendered on the Company's
financial statements; or (iii) any matter that was the subject of a disagreement
with the Company's former accountant or a reportable event (as contemplated by
Item 304 of Regulation S-B).
The Company provided Ernst & Young with a copy of this Current Report, has
requested that Ernst & Young review such report before it is filed with the
Commission and has given Ernst & Young the opportunity to furnish the Company
with a letter addressed to the Commission containing any new information,
clarification or statement as to whether it agrees with the statements made by
the Company regarding the Company's relationship with Ernst & Young.
ITEM 5. OTHER EVENTS
Not Applicable.
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
Not Applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS. Not Applicable.
(b) PRO FORMA FINANCIAL STATEMENTS. Not Applicable.
(c) EXHIBITS. The following exhibit is included herein:
Exhibit 16.1- Letter from BDO Seidman, LLP to the Securities and
Exchange Commission.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THINK NEW IDEAS, INC.
Date: February 24, 1998 By:/s/ Melvin Epstein
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Melvin Epstein,
Chief Financial Officer
February 19, 1998
United States Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: THINK NEW IDEAS, INC.
Ladies and Gentlemen:
We have been furnished with a copy of the Form 8-K for the event that
occurred on February 13, 1998 to be filed by our former client THINK New Ideas,
Inc. We agree with the statements made in response to Item 4 insofar as such
response relates to our Firm.
Very truly yours,
/s/ BDO Seidman, LLP
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BDO Seidman, LLP
