UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): May 23, 2000
TAPISTRON INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Georgia 0-20309 58-1684918
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
6203 Alabama Highway; Ringgold, Georgia 30736-1067
(Address of principal executive offices) (Zip Code)
(706) 965-9300
(Registrant's telephone number, including area code)
<PAGE>
Item 4. Change in Registrant's Certifying Accountant
As of May 23, 2000, Barfield, Murphy, Shank & Smith, PC, Certified Public
Accountants (the "Accountants"), were engaged by Tapistron International, Inc.
(the "Company") to serve as the Company's certifying accountants.
For the past two fiscal years and subsequently through May 23, the Company did
not consult with the Accountants regarding (i) either the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial
statements or (ii) any matter that was either the subject of a disagreement or
was a reportable event.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99 Engagement letter from Barfield, Murphy, Shank & Smith, PC
dated May 23, 2000.
2
<PAGE>
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 thereunto duly authorized.
Tapistron International, Inc.
(Registrant)
May 25, 2000 By /s/ Rodney C. Hardeman, Jr.
---------------------------
Rodney C. Hardeman, Jr.
President and Chief Executive Officer
3
May 23, 2000
The Audit Committee
Tapistron International, Inc.
P. O. Box 1067
Ringgold, Georgia 30736-1067
We are pleased to confirm our understanding of the services we are to provide
for Tapistron International, Inc. for the year ended July 31, 2000.
We will audit the balance sheet of Tapistron International, Inc. as of July 31,
2000, and the related statements of operations, retained earnings, and cash
flows for the year then ended.
The objective of our audit is the expression of an opinion about whether your
financial statements are fairly presented, in all material respects, in
conformity with generally accepted accounting principles. Our audit will be
conducted in accordance with generally accepted auditing standards and will
include tests of your accounting records and other procedures we consider
necessary to enable us to express such an opinion. If our opinion is other than
unqualified, we will discuss the reasons with you in advance. If, for any
reason, we are unable to complete the audit or are unable to form or have not
formed an opinion, we may decline to express an opinion or to issue a report as
a result of this engagement.
Our procedures will include tests of documentary evidence supporting the
transactions recorded in the accounts, tests of the physical existence of
inventories, and direct confirmation of receivables and certain other assets and
liabilities by correspondence with selected customers, creditors, and banks. We
will request written representations from your attorneys as part of the
engagement, and they may bill you for responding to this inquiry. At the
conclusion of our audit, we will require certain written representations from
you about the financial statements and related matters.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements; therefore, our audit will involve
judgment about the number of transactions to be examined and the areas to be
tested. Also, we will plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
Because of the concept of reasonable assurance and because we will not perform a
detailed examination of all transactions, there is a risk that material errors,
fraud, or other illegal acts, may exist and not be detected by us. In addition,
an audit is not designed to detect errors, fraud, or other illegal acts that are
immaterial to the financial statements. Our responsibility as auditors is
limited to the period covered by our audit and does not extend to any later
periods for which we are not engaged as auditors.
Our audit will include obtaining an understanding of internal control sufficient
to plan the audit and to determine the nature, timing, and extent of audit
procedures to be performed. An audit is not designed to provide assurance on
internal control or to identify reportable conditions, that is, significant
deficiencies in the design or operation of internal control. However, during the
audit, if we become aware of such reportable conditions, we will communicate
them to you.
<PAGE>
We understand that you are responsible for making all financial records and
related information available to us and that you are responsible for the
accuracy and completeness of that information. We will advise you about
appropriate accounting principles and their application and will assist in the
preparation of your financial statements, but the responsibility for the
financial statements remains with you. This responsibility includes the
establishment and maintenance of adequate records and effective internal
controls over financial reporting, the selection and application of accounting
principles, and the safeguarding of assets. Management is also responsible for
identifying and ensuring that the entity complies with applicable laws and
regulations.
We understand that your employees will prepare all cash, accounts receivable,
and other confirmations we request and will locate any documents selected by us
for testing.
Our audit is being performed solely for the benefit of Tapistron International,
Inc. Also, we will not disclose any information or other findings to an outside
third party without your permission.
We have advised you of the limitations of our audit regarding the detection of
fraud that is immaterial to the financial statements including immaterial
misappropriation of cash or other assets. We can at your written request perform
other agreed-upon procedures specifically designed to detect such immaterial
fraud for an additional fee. Although you understand the limitations of our
audit, you do not wish to engage us to perform any such additional procedures at
this time.
As part of our engagement, we will also prepare the federal and state income tax
returns for your company for the year ended July 31, 2000.
In addition to the audit and tax returns we will assist you in the preparation
of form 10-K for filing with the SEC. We will review the interim financial
statements to be included in your form 10-Q, beginning with the quarter ending
April 30, 2000.
We expect to begin our audit on approximately August 14, 2000 and to complete
your tax returns and issue our report no later than October 15, 2000. We will
observe the counting of inventories on July 31, 2000.
Our fees for the audit will be based on the complexity of the project and our
standard per diem hourly rates. You will also be billed for travel and other
out-of-pocket costs. Our invoices for these fees will be rendered each month as
work progresses and are payable on presentation. In accordance with our firm
policies, work may be suspended if your account becomes 90 days or more overdue
and will not be resumed until your account is paid in full. If we elect to
terminate our services for nonpayment, you will be obligated to compensate us
for all time expended and to reimburse us for all out-of-pocket expenditures
through the date of termination, and to pay all costs of collection, including
reasonable attorney fees, whether or not a lawsuit is commenced as part of the
collection process.
We understand that you intend to include our report in your annual report to
shareholders and form 10-K to be filed with the SEC, and make reference to us in
such filing as auditors. You agree to provide us with printer's proofs of
masters for our review and approval before printing. You also agree to provide
us with a copy of the final reproduced material for our approval before it is
distributed.
<PAGE>
You agree that our liability hereunder from damages, regardless of the form of
action, shall not exceed the total amount paid for the services described in
this letter. You agree that Barfield, Murphy, Shank & Smith, P.C. shall not be
held liable for any lost profits, or for any claim or demand against you by any
other party, and we are not liable for incidental or consequential damages
unless this letter has been modified to include the possibility of such
liability.
We appreciate the opportunity to be of service to you and believe this letter
accurately summarizes the significant terms of our engagement. If you have any
questions, please let us know. If you agree with the terms of our engagement as
described in this letter, please sign the enclosed copy and return it to us.
Sincerely,
Barfield, Murphy, Shank & Smith, PC
RESPONSE:
This letter correctly sets forth the understanding of Tapistron International,
Inc.
Signature: /s/ Jack Godfrey
- ---------------------------------------
Title: Chairman - Audit Committee
- ---------------------------------------
Date: May 25, 2000
- ---------------------------------------
