SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): March 11, 1998
SWISHER INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-21282 56-1541396
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
6849 Fairview Road, Charlotte, North Carolina 28210
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(Address of principal executive office) (Zip code)
Registrant's telephone number including area code: (704) 364-7707
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(Former name or former address, if changed since last report)
Exhibit Index on Page 5<PAGE>
<PAGE>02
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On March 11, 1998, Swisher International, Inc. (the "Company"),
received the response of its former auditors, McGladrey & Pullen, LLP (the
"Former Auditor") to the Company's Current Report on Form 8-K filed with the
Commission on February 27, 1998 which Form 8-K announced that the Former
Auditor had resigned from the Company's 1997 audit and withdrawn its opinion
on the Company's 1996 financial statements. The March 11, 1998 responses of
the Former Auditor, annexed hereto as Exhibits 99.1 and 99.2, are incorporated
in their entirety by reference in response to this Item 4. The position of
the Company on disputed issues is set forth in its February 27, 1998 Form 8-K
filing, and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
c) Exhibits
99.1 Letter from McGladrey & Pullen, LLP, to the Commission dated
March 11, 1998.
99.2 Letter from McGladrey & Pullen, LLP, to the Company dated
March 11, 1998.
99.3 Letter from the Company to McGladrey & Pullen, LLP, dated
February 27, 1998. <PAGE>
<PAGE>03
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.
SWISHER INTERNATIONAL, INC.
Date: March 13, 1998 By: /s/ Patrick L. Swisher
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Patrick L. Swisher,
President and CEO
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<PAGE>04
INDEX TO EXHIBITS
FORM 8-K
Exhibit Page
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99.1 Letter from McGladrey & Pullen, LLP, to the Commission dated
March 11, 1998.
99.2 Letter from McGladrey & Pullen, LLP, to the Company dated
March 11, 1998.
99.3 Letter from the Company to McGladrey & Pullen, LLP, dated
February 27, 1998.
March 11, 1998
Securities and Exchange Commission
Mail Stop 9-5
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read the comments in Item 4 of Form 8-K of Swisher International, Inc.
(Company) dated February 18, 1998.
We do not agree with the following comments included therein:
- - The Form 8-K included the text of our letter, dated February 20, 1998,
but did not disclose that such letter was addressed to Mr. Patrick L.
Swisher, President, and George K. Moore, Director.
- - The first paragraph, fourth sentence: "Not until February 17, 1998 was
the Company asked through a member of its Board of Directors, to meet
with the former auditor". This meeting occurred on February 16, 1998.
At this meeting, McGladrey & Pullen, LLP (McGladrey) personnel reviewed
with W. Tom Reeder, Vice President, and George K. Moore, Director, the
matters subsequently summarized in our February 20 letter. During the
meeting on February 16 and in subsequent meetings on February 18 and
February 19, Company representatives provided certain responses to the
issues raised by McGladrey. Prior to the February 16 meeting referred
to above, McGladrey had discussed with Company management and/or Mr.
Moore each of the accounting and disclosure matters set forth in the
February 20, 1998 letter. On February 20, 1998, McGladrey concluded
that we were no longer able to rely on management's representations.
- - The first paragraph, seventh sentence: "On February 18 and 19, 1998,
the former auditor, without waiting for additional information that the
Company was prepared to provide, indicated that it intended to resign
and that it was withdrawing its opinion for fiscal year 1996 as stated
above". The Company presented additional information to McGladrey on
February 18 and 19, 1998. McGladrey considered the additional evidence
provided during those discussions and subsequently reaffirmed our
decision to resign and to withdraw our report, dated January 30, 1997,
on the Company's financial statements for the year ended October 31,
1996.
- - The second paragraph, second sentence: "The Company believes that
significant information affecting these issues has not been received by
the former auditor." McGladrey believes that the Company has had an
adequate opportunity to bring any such significant information to our
attention.
<PAGE>
<PAGE>
- - The fourth paragraph, number 1 bullet parenthetical comment: "(the
question presented for the financial statements being whether the sale
should be recognized under applicable accounting principles in fiscal
year 1996 or fiscal year 1997);". Our letter dated February 20, 1998,
states that we "conclude that a sale of the franchise had not occurred
as of October 31, 1997."
- - The fourth paragraph, number 2 bullet parenthetical comment: "(the
Former Auditor acknowledged that it knew in April 1997 that the
agreements in question had not been approved by the Swisher Board of
Directors which subsequently determined the agreements were
unenforceable because they were unauthorized and caused the Company and
other involved parties to agree that the agreements were not legally
enforceable; thus, the agreements were never effected)" We
supplementally add: (i) at the date of issuance of its report on the
1996 financial statements, the Company had not informed McGladrey
regarding the grant of these options and warrants, and (ii) the options
and warrants in question were granted by Mr. Swisher to two unrelated
parties.
- - We agree with the remaining comments included therein except for the
following comment, for which we have no basis to agree or disagree:
- - The fourth paragraph, number 5 bullet, parenthetic comment: "(these
amounts have now been repaid)".
We wish to clarify the Company's comments in paragraph 3 attributed to us. We
issued a clarifying letter to the Company on February 27 which reaffirmed our
February 20 letter, and documented our agreement to delay the withdrawal of
our report on the Company's 1996 financial statements. This delay was agreed
to allow the Company reasonable time (defined in that letter as 5:00pm EST,
Monday, March 9, 1998) to perform a thorough and independent investigation of
the matters discussed in our February 20 letter. The Company informed us on
March 10, 1998, that the special investigation will be completed in an
additional two to three weeks. Based upon our current assessment, we have
issued a letter to the Company dated March 11, 1998, enclosed, withdrawing
our report on the 1996 financial statements. We believe that the Company's
1996 financial statements are misstated with respect to certain related party
disclosures and other accounting matters as set forth in our February 20, 1998
letter.
Yours truly,
McGLADREY & PULLEN, LLP
Enclosure
March 11, 1998
Board of Directors
Swisher International, Inc.
6849 Fairview Road
Charlotte, North Carolina 28210
Gentlemen:
McGladrey notifies Swisher International, Inc. (Swisher) of the following:
1. For the reasons recited in McGladrey's February 20, 1998, letter,
McGladrey withdraws its audit report on Swisher's 1996 financial
statements.
2. Swisher should notify any person known or likely to rely on the 1996
financial statements and related report that they should not be relied
upon and that McGladrey's audit report is not associated with the
financial statements.
3. The enclosed February 27, 1998, letter from Swisher's General Counsel
constitutes a potential threat of litigation against McGladrey thus
impeding further investigative efforts and impairing McGladrey's
audit independence.
4. Because of this threat and its impact on audit independence, McGladrey
is no longer in a position to consider further the issuance of revised
1996 financial statements and auditor's report.
Sincerely,
McGLADREY & PULLEN, LLP
Enclosure
Via Fax #612-921-7702
and
Certified Mail #P 539 688 760
Return Receipt Requested
February 27, 1998
Mr. William D. Travis
McGladrey & Pullen, LLP
3600 West 80th Street
Suite 500
Minneapolis, Minnesota 55431
Dear Mr. Travis:
I am writing to respond to your letter to Messrs. Swisher and Moore dated
February 27, 1998. I understand that McGladrey & Pullen has decided to delay
any decision as to whether to withdraw its opinion relating to the Company's
1996 financial statement until it receives Swisher's written responses to the
matters enumerated in your letter of February 20, 1998. We continue to have
serious concerns as to McGladrey & Pullen's decision to resign its engagement
with respect to the 1997 financial statements without providing the Company
with an adequate opportunity to respond to the issues raised.
I can confirm that the Company has retained the law firm of Swidler & Berlin
to conduct a thorough and independent investigation which will address the
matters set forth in your February 20, 1998 letter. The results of that
investigation will be provided to a Special Investigation Committee, separate
from the Board of Directors, which is in the process of being established.
You request that the Company provide you with the results of that
investigation by March 9, 1998. Swidler & Berlin has advised me that it is
unlikely that its investigation will be completed by that time, given the need
to assure that the investigation is thorough and accurate. Once the
investigation is completed, the Special Investigation Committee will determine
whether, and to what extent, the written results of the investigation will be
provided to third-parties.
The Company firmly believes that McGladrey & Pullen should defer any decision
to withdraw its 1996 report, whether or not it receives the results of the
independent investigation by March 9. The Company will provide you with all
non-privileged documents relevant to any of the matters raised in your
February 20, 1998 letter pertaining to the 1996 opinion. The Company further
agrees to provide you with its written response to the enumerated matters in a
timely manner. That information will provide McGladrey & Pullen with all
relevant, non-privileged information necessary to determine whether its prior
opinion should be withdrawn. If McGladrey & Pullen withdraws its opinion
before receiving that information, serious questions would be raised as to its
good faith in this matter.
Very truly yours,
James A. Marshall
Vice President & General Counsel
