UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): March 17, 1998
NUKO Information Systems, Inc.
(Exact name of registrant as specified in its charter)
Delaware 2-31438 16-096287
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
2391 Qume Drive
San Jose, California 95131
(Address of principal executive offices, including Zip Code)
(408) 526-0288
(Registrant's telephone number, including area code)
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Item 4 Changes in Registrant's Certifying Accountant
(a) Previous independent accountants
On March 17, 1998, NUKO Information Systems, Inc. (the "Registrant"),
through action of its Board of Directors, accepted the resignation of Coopers &
Lybrand L.L.P. ("Coopers") as its independent accountants, effective March 17,
1998. Coopers issued its only report on the financial statements of the
Registrant for the year ended December 31, 1996 and, as of the date of its
resignation, had not conducted an audit or issued any report on the Registrant's
financial statements for the year ended December 31, 1997.
Cooper's report on the financial statements of the Registrant for the
year end December 31, 1996 contained no adverse opinion or disclaimer of opinion
and was not qualified or modified as to uncertainty, audit scope or accounting
principle, other than such report included an emphasis paragraph concerning the
Registrant's ability to continue as a going concern as a result of recurring
losses from operations.
In connection with the audit for the year ended December 31, 1996, and
through March 17, 1998, the Registrant has had no disagreements with Coopers 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 Coopers would have caused it to make reference thereto in
its report on the consolidated financial statements for such year other than as
follows:
In connection with the preparation of the Registrant's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997, Coopers had disagreements
with management regarding application of the Registrant's revenue recognition
policy to certain transactions. The disagreements were resolved and a
substantial portion of the Registrant's revenue and the associated gross margin
recorded for such period was reversed prior to the filing of the Registrant's
Quarterly Report on Form 10-Q for the period ended March 31, 1997. The Audit
Committee and Board of Directors were advised of the disagreements.
The Registrant has authorized Coopers to respond fully to the inquiries
of the successor accountant, once appointed, concerning these issues.
There is no information or event required to be reported pursuant to
Subsection (a)(1)(v) of Item 304 of Regulation S-K, except for certain
weaknesses in the Registrant's internal controls as to which Coopers advised the
Registrant in a management letter dated April 14, 1997 (the "Management Letter")
relating to its audit of the Registrant's December 31, 1996 financial
statements. Certain of the issues raised in the Management Letter may be deemed
to be "reportable events," as that term is defined in Item 304(a)(1)(v) of
Regulation S-K, as follows:
The Management Letter stated Coopers' belief that the Registrant's
basic accounting software was not sufficient for a fast growing public company
and that other accounting systems, such as a perpetual inventory system, a fixed
assets subledger and an options tracking system,
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were lacking. The Management Letter also addressed certain weaknesses in the
Registrant's internal controls, including (i) insufficient procedures and
policies to ensure cut-off of transactions at each period end; and (ii) lack of
a reliable mechanism for ensuring that all revenue generating transactions are
invoiced on a timely basis. The Management Letter also addressed Coopers'
position that the Registrant's inventory valuation methodology could understate
the inventory balance and recommended implementing a standard cost valuation
method and that due to the lack of an appropriate inventory system, the
Registrant was unable to accurately evaluate the level of excess or obsolete
inventory on hand.
The Registrant provided Coopers with a copy of this Current Report on
Form 8-K (the "Current Report") and requested that Coopers furnish the
Registrant with a letter addressed to the Securities and Exchange Commission
stating whether Coopers agrees with the statements made by the Registrant
hereinabove and, if not, stating the respects in which it does not agree. A copy
of the letter of Coopers will be filed as Exhibit 16.1 on an amended Current
Report.
(b) New independent accountants
The Registrant has not yet engaged new independent accountants to audit
its financial statements for the year ended December 31, 1997.
Item 7. Financial Statements and Exhibits
Exhibit 16.1 Letter from Coopers & Lybrand L.L.P. 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 report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 7, 1998
NUKO INFORMATION SYSTEMS, INC.
(Registrant)
By: /s/ Pratap Kesav Kondamoori
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President and Chief Executive Officer
3
Exhibit 16.1
[COOPERS & LYBRAND L.L.P. LETTERHEAD]
April 3, 1998
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Commissioners:
We have read the statements made by NUKO Information Systems Inc. (copy
attached), which we understand were 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 March
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.
