C-PHONE CORP
8-K, 2000-03-10
TELEPHONE & TELEGRAPH APPARATUS
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                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 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): March 7, 2000
                                                           -------------



                               C-PHONE CORPORATION
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)




          NEW YORK                        0-24424                 06-1170506
- --------------------------------------------------------------------------------
(State or Other Jurisdiction           (Commission)             (IRS Employer
     of Incorporation)                 File Number)          Identification No.)




   6714 NETHERLANDS DRIVE, WILMINGTON, NORTH CAROLINA             28405
- --------------------------------------------------------------------------------
        (Address of principal executive offices)                (Zip Code)




       Registrant's telephone number, including area code: (910) 395-6100
                                                           --------------



                                       N/A
- --------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)

<PAGE>


ITEM 4.           CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.

On March 7, 2000, C-Phone Corporation dismissed PricewaterhouseCoopers LLP as
its independent accountants, and appointed the accounting firm of Ernst & Young,
LLP. C-Phone's Audit Committee and Board of Directors participated and approved
the decision to change independent accountants. The reports of
PricewaterhouseCoopers LLP on the financial statements for the past two years
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principle.

In connection with its audits of the two most recent fiscal years and through
March 7, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
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 PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.

The Registrant has supplied PricewaterhouseCoopers LLP with a copy of this Form
8-K in compliance with Item 304(a)(3) of Regulation S-K of the Securities and
Exchange Commission.

ITEM 6.           OTHER EVENTS.

On March 6, 2000, C-Phone announced that Paul Albritton had been appointed our
President and Chief Executive Officer. Mr. Albritton, who has been our Chief
Financial Officer of the Company for more than five years, also has been elected
to our Board of Directors. Mr. Albritton replaces Daniel Flohr, who had been our
President and Chief Executive Officer since our inception. Mr. Flohr will
continue as Chairman of the Board and will act as a strategic advisor. C-Phone
also announced that Kurt Svendsen, who has been serving as our controller since
December 1998, has being promoted to Vice President and Chief Financial Officer.
Mr. Svendsen is a licensed CPA. In addition to the foregoing management changes,
Tina Jacobs, who had been our Executive Vice President and Chief Operating
Officer, has resigned such positions, but will continue as our Secretary and
Treasurer of the Company, as well as a member of our Board of Directors.

On March 9, 2000, C-Phone announced that it has been informed that, effective
March 13, 2000, the C-Phone common stock will be traded on the Nasdaq SmallCap
Market.
The trading symbol will remain "CFON."

In January 2000, C-Phone announced that it was restructuring its operations to
reduce its ongoing operating expenses, exploring certain strategic initiatives
and increasing its focus on attempting to develop major OEM, distribution and
licensing relationships.

                                        2
<PAGE>


ITEM 7.           FINANCIAL STATEMENTS  AND EXHIBITS.

                  (c)      Exhibits.

                  16.      Letter from PricewaterhouseCoopers LLP pursuant to
                           Item 304(a)(3) of Regulation S-K of the Securities
                           and Exchange Commission

                  99.      Press Release, dated March 6, 2000

                               * * * * * * * * * *

                                   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.


                                        C-PHONE CORPORATION


                                        By:  /s/ PAUL H. ALBRITTON
                                             ---------------------------------
                                                 President and Chief Executive



Date:  March 8, 2000

                                        3


                                                                      Exhibit 16


March 7, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Commissioners:

We have read the statements made by C-Phone Corporation (copy attached), which
we understand will be filed with the Commission, pursuant to Item 4 of Form 8-K,
as part of the Company's Form 8-K report dated March 8, 2000.

We agree with the statements concerning our Firm in such Form 8-K.

Very truly yours,

/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP

                                        4


                                                                      Exhibit 99


CONTACT:            Joseph A. Mansi                    Paul Albritton
                    KCSA Worldwide                     C-Phone Corporation
                    (212) 896-1205                     (910) 395-6100
                    [email protected]                    [email protected]

                                                               IMMEDIATE RELEASE

                       C-PHONE APPOINTS PAUL ALBRITTON NEW
                             CHIEF EXECUTIVE OFFICER
                                    - - - - -
                        Former CFO Also Elected To Board


WILMINGTON, N.C., March 6, 2000 - C-Phone Corporation (NASDAQ:CFON) today
announced that Paul Albritton (56) has been appointed President and Chief
Executive Officer of the Company.

         Mr. Albritton, who has been Chief Financial Officer of the Company for
more than five years, also has been elected to the Company's Board of Directors.

         Mr. Albritton replaces Daniel Flohr, who had been President and Chief
Executive Officer of the Company since its inception. Mr. Flohr will continue as
Chairman of the Board and will act as a strategic advisor to the Company. Mr.
Flohr commented that, "having initially hired Paul Albritton and having worked
closely with Paul during the past few years, I am completely confident that Paul
has the knowledge, understanding, experience and skills needed to lead and
manage C-Phone in its continuing evolution. I look forward to aiding Paul in his
new role and assisting in the development of C-Phone's technologies and
progress. Mr. Flohr intends to focus his day-to-day efforts as chief executive
of a New York based, fiber optic telecommunication services company.

         Mr. Albritton announced that Kurt Svendsen, who has been serving as
controller of the Company since December 1998, is being promoted to Vice
President and Chief Financial Officer. Mr. Svendsen is a licensed CPA.

         In addition to the foregoing management changes, Tina Jacobs, who had
been Executive Vice President and Chief Operating Officer of the Company, has
resigned such positions, but will continue as Secretary and Treasurer of the
Company, as well as a member of its Board of Directors.

                                        5
<PAGE>


         C-Phone Corporation provides state-of-the-art video communications
products for general business and niche markets, including security, education
and healthcare. Affordable and easy to use, C-Phone products deliver high
quality, real time video, voice and data for conferencing and remote monitoring
applications. C-Phone technology is compatible with all industry standards and
connects through a wide variety of telephone company and private communications
networks, including the Internet. C-Phone products are marketed throughout the
world and are in use by a diverse group of corporate, institutional and
governmental customers. Information on the Company and its products can be found
at www.cphone.com.

                                      # # #

STATEMENTS MADE IN THIS PRESS RELEASE, OTHER THAN THOSE CONCERNING HISTORICAL
INFORMATION, SHOULD BE CONSIDERED FORWARD-LOOKING AND SUBJECT TO VARIOUS RISKS
AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS ARE MADE BASED ON
MANAGEMENT'S BELIEF AS WELL AS ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY
AVAILABLE TO, MANAGEMENT PURSUANT TO THE SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. THE COMPANY'S ACTUAL RESULTS MAY
DIFFER MATERIALLY FROM THE RESULTS ANTICIPATED IN THESE FORWARD-LOOKING
STATEMENTS AS A RESULT OF A VARIETY OF FACTORS, INCLUDING AMONG OTHERS, THOSE
IDENTIFIED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED FEBRUARY 28, 1999, AND THE COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR
THE FISCAL QUARTER ENDED AUGUST 31, 1999, AS WELL AS FACTORS SUCH AS FUTURE
ECONOMIC CONDITIONS, ACCEPTANCE BY CUSTOMERS OF THE COMPANY'S PRODUCTS, CHANGES
IN CUSTOMER DEMAND, LEGISLATIVE, REGULATORY AND COMPETITIVE DEVELOPMENTS IN
MARKETS IN WHICH THE COMPANY OPERATES AND OTHER CIRCUMSTANCES AFFECTING REVENUES
AND COSTS. THE COMPANY UNDERTAKES NO OBLIGATION TO RELEASE PUBLICLY THE RESULT
OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS THAT MAY BE MADE TO REFLECT
EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS PRESS RELEASE OR TO REFLECT THE
OCCURRENCE OF OTHER UNANTICIPATED EVENTS.


THIS RELEASE AND PRIOR RELEASES ARE AVAILABLE ON THE KCSA PUBLIC RELATIONS
WORLDWIDE WEBSITE AT www.kcsa.com.

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