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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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) August 13, 1997
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INTELECT COMMUNICATIONS SYSTEMS LIMITED
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(Exact Name of Registrant as Specified in Its Charter)
Bermuda
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(State or Other Jurisdiction of Incorporation)
0-11630 N/A
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(Commission File Number) (I.R.S. Employer Identification No.)
1100 Executive Drive, Richardson, Texas 75081
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(Address of Principal Executive Offices) (Zip Code)
(972) 367-2100
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Address, if Changed Since Last Report)
8K-1
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Item 4. Changes in Registrant's Certifying Accountant.
(a) Previous independent accountants
(i) The term of the Registrant's current independent auditors,
KPMG Peat Marwick, Chartered Accountants, Hamilton, Bermuda
("KPMG"), expired at the annual general meeting of the
Registrant's shareholders held August 13, 1997.
(ii) The KPMG report dated April 9, 1997 on the consolidated
financial statements of the Registrant for the year ended
December 31, 1996 (the "KPMG Report") noted that the
consolidated financial statements and financial statement
schedule accompanying the report were prepared assuming
that the Registrant would continue as a going concern. The
KPMG Report further noted that as discussed in Note 1 to
the consolidated financial statements, the Registrant has
suffered recurring losses from continuing operations and is
dependent upon the successful development and
commercialization of its products and its ability to secure
adequate sources of capital until the Registrant is
operating profitably. The KPMG Report noted that these
matters raise substantial doubt about the Registrant's
ability to continue as a going concern, and that
management's plans with regard to these matters were
described in Note 1 to the consolidated financial
statements.
(iii) The Registrant's Board of Directors, in accordance with the
recommendation of its Audit Committee, which is composed of
non-employees of the Registrant, has requested Arthur
Andersen LLP ("Arthur Andersen") to act as independent
auditors of the Registrant for the 1997 fiscal year,
subject to shareholder approval, in replacement of KPMG.
(iv) During the two years ended December 31, 1995 and December
31, 1996 and the subsequent interim period through the date
hereof, there were no "disagreements" between the
Registrant and KPMG as described in Item 304(a)(1)(iv) of
Regulation S-K.
(v) The Registrant has requested KPMG to furnish it with a
letter addressed to the SEC stating whether or not it
agrees with the above statements. A copy of such letter,
dated August 14, 1997 is filed as Exhibit 16 to this Form
8-K.
8K-2
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(b) New independent accountants
(i) The Registrant engaged Arthur Andersen as its new
independent accountants, subject to approval by the
Registrant's shareholders at their August 13, 1997 annual
meeting. During the two most recent fiscal years and the
subsequent interim period through the date hereof, the
Registrant has not consulted with Arthur Andersen (1)
regarding either the application of accounting principles
to a specified transaction, either completed or proposed,
or the type of an audit opinion that might be rendered on
the Registrant's financial statements, or (2) concerning
the subject matter of a disagreement with KPMG (as defined
in Regulation S-K Item 304(a)(1)(iv)) or a reportable event
(as defined in Regulation S-K Item 304(a)(1)(v)).
Item 7. Financial Statements and Exhibits
(c) Exhibits:
*16 - Letter from KPMG Peat Marwick
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* - Filed herewith
8K-3
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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.
INTELECT COMMUNICATIONS SYSTEMS LIMITED
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(Registrant)
August 18, 1997 By: /s/ Herman M. Frietsch
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Date Herman M. Frietsch
Chairman of the Board and CEO
8K-4
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
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<S> <C>
EX 16 LETTER FROM KPMG PEAT MARWICK
</TABLE>
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EXHIBIT 16
Securities and Exchange Commission
Washington, DC 20549
August 14, 1997
Ladies and Gentlemen
We were previously principal accountants for Intelect Communications Systems
Limited and, under the date of April 9, 1997, we reported on the consolidated
financial statements of Intelect Communications Systems Limited and
subsidiaries as of December 31, 1996 and 1995 and for the year ended December
31, 1996, the two month period ended December 31, 1995 and the years ended
October 31, 1995 and 1994. On August 13, 1997 our appointment as principal
accountants was terminated. We have read Intelect Communications Systems
Limited's statements included under item 4 of its Form 8-K dated August 13,
1997 and we agree with such statements, except that we are not in a position to
agree or disagree with Intelect Communications Systems Limited's statements
that the change was recommended by the audit committee of the board of
directors and that Arthur Andersen was not consulted regarding the application
of accounting principles to a specified transaction, either completed or
proposed, or the type of audit opinion that might be rendered on Intelect
Communications Systems Limited's financial statements.
Yours faithfully
/s/ KPMG Peat Marwick
KPMG Peat Marwick
