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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of Earliest Event Reported) Commission File Number:
MAY 5, 1998 1-13408
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DIGITAL RECORDERS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 56-1362926
(State of incorporation) (I.R.S. Employer
Identification Number)
2300 Englert Drive, Suite B
Research Triangle Park, North Carolina 27709-4068
(919) 361-2155
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(Address of principal executive
offices and telephone number)
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ITEM 4. Changes in Registrant's Certifying Accountant
(a) (1) Previous independent accountants.
(i) Digital Recorders, Inc. (the "Company") determined a plan of rotation
of independent public accountants would be beneficial to the Company.
The Company solicited proposals from various accounting firms. KPMG
Peat Marwick LLP (the "Former Accountants"), which had acted as the
independent public accountants for the Company for the prior eight
fiscal years, was not asked to submit a proposal after Form 10-KSB for
December 31, 1997 was filed with the SEC on April 20, 1998.
(ii) The Former Accountants reported on the Company's financial statements
for the fiscal years ended December 31, 1990 through December 31,
1997. The report of the Former Accountants on the financial statements
for each of such years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit
scope or accounting principles.
(iii) The Company's Board of Directors approved the new independent
accountants on May 11, 1998 based on the proposals submitted.
(iv) During the Company's fiscal years ended December 31, 1996 and 1997,
and through the date of this report, there were no disagreements with
the Former Accountants 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
the Former Accountants would have caused them to make reference
thereto in their report on the financial statements for such years.
(v) During the fiscal years ended December 31, 1996 and 1997, and through
the date of this report, none of the events described in paragraphs
(a)(1)(v)(A) through (D) of Item 304 of Regulation S-B occurred.
(a) (2) The Registrant engaged McGladrey & Pullen, LLP, as its new independent
accountants effective May 11, 1998. During the two fiscal years
preceding its appointment and through the date hereof, the Company had
not consulted with McGladrey & Pullen, LLP, on items regarding:
(i) The application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might be
rendered on the Company's financial statements; there was no written
or oral advice provided that was an important factor in reaching a
decision as to any accounting, auditing or financial reporting issue;
or
(ii) Any matter that was the subject of a disagreement (as defined in
paragraph (a)(1)(iv) of Item 304 of Regulation S-B) or a reportable
event (as described in paragraph (a)(1)(v) of Item 304 of Regulation
S-B).
(a) (3) The Company provided the Former Accountants with a copy of the
foregoing disclosures and requested in writing that the Former
Accountants furnish it with a letter addressed to the SEC stating
whether or not it agrees with such disclosures. A copy of such letter
is filed as an exhibit to this Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits
16.1 Letter from the Former Accountants as described in paragraph 4(a)(3)
above.
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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.
DIGITAL RECORDERS, INC.
Date: May 12, 1998 By: /s/ David L. Turney
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David L. Turney, Chairman of the
Board and Chief Executive Officer
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Securities and Exchange Commission
Washington, D.C. 20549
May 12, 1998
Ladies and Gentlemen:
We were previously principal accountants for Digital Recorders, Inc. and, under
the date of March 20, 1998, we reported on the consolidated financial
statements of Digital Recorders, Inc. and subsidiaries as of and for the years
ended December 31, 1997 and 1996. On May 5, 1998, our appointment as principal
accountants was terminated. We have read Digital Recorders, Inc.'s statements
included under Item 4 of its Form 8-K dated May 12, 1998, and we agree with
such statements.
Very truly yours,
KPMG Peat Marwick LLP
