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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): February 27, 1998
Imagyn Medical Technologies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11150 98-0122944
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(State or other jurisdiction (Commission (IRS Employer
of incorporation or organization) File Number) Identification No.)
5 Civic Plaza, Suite 100, Newport Beach, CA 92660
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 668-5858
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Effective February 27, 1998, Imagyn Medical Technologies, Inc. (the
"Company") notified Ernst & Young LLP that the Company had elected to change
independent auditors for the Company.
The Company has retained Deloitte & Touche LLP to serve as its
independent auditors to audit the financial statements of the Company. The
change of independent auditors was approved by both the Audit Committee of the
Board of Directors and the Board of Directors.
During the Company's two most recent fiscal years and the subsequent
interim period before the dismissal of Ernst & Young LLP, there have been no
disagreements between the Company and Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure which, if not resolved to Ernst & Young's satisfaction, would
have caused it to make a reference to the subject matter of the disagreement in
connection with its report. Ernst & Young's report on the Company's financial
statements for the two most recent fiscal years did not contain any adverse
opinion and was not qualified as to uncertainty, audit scope or accounting
principles.
In connection with the completion of the audit for the year ended March
31, 1997, Ernst & Young LLP informed the Company that certain material
weaknesses in internal accounting control structure elements do not reduce to a
relatively low level of risk the potential for errors or irregularities in
amounts that would be material in relation to the consolidated financial
statements occurring and not being detected in a timely manner by employees in
the normal course of performing their assigned functions. Ernst & Young LLP
suggested that the Company establish better controls over implementation of
revenue recognition policies, particularly with respect to the introduction of
new products; that the Company improve financial oversight of and controls over
divisional operations and related party disbursements; and that the Company
develop better controls over and documentation for non-routine data process
entries. Ernst & Young acknowledged that some of the issues raised may have been
based on isolated incidents that came to their attention and that some of the
weaknesses may have resulted from the demands on the Company relating to the
integration of a dozen business acquisitions during fiscal 1997, as well as
other significant transactions occurring during the year.
Management believes that during fiscal 1998 it has addressed the
internal accounting control concerns raised by Ernst & Young LLP.
Deloitte & Touche LLP's engagement is effective March 3, 1998. During
the Company's two most recent fiscal years and the subsequent interim period
before the engagement of Deloitte & Touche LLP, the Company has not consulted
with Deloitte & Touche LLP on the application of accounting principles or
practices, financial statement disclosure or prospective audit opinions or been
provided any advice by Deloitte & Touche LLP, that was an important factor
considered by the Company in reaching a decision as to an accounting, auditing
or financial reporting issue.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
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Exhibit No. Description
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16 Letter of Ernst & Young LLP
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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.
IMAGYN MEDICAL TECHNOLOGIES, INC.
By: Michael A. Montevideo
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March 5, 1998 Senior Vice President and
Chief Financial Officer
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EXHIBIT 16
[letterhead of Ernst & Young LLP]
March 5, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Gentlemen:
We have read Item 4 of Form 8-K dated March 5, 1998 of Imagyn Medical
Technologies, Inc. and are in agreement with the statements with respect to our
firm contained in the first, third and fourth paragraphs on page 2 therein. We
have no basis to agree or disagree with other statements of the registrant
contained therein.
Regarding the registrant's statement made pursuant to Regulation S-K Item
304(a)(v)(A), included in the fourth paragraph on page 2 therein, we had
considered such matters in determining the nature, timing and extent of
procedures performed in our audit of the registrant's consolidated financial
statements for the year ended March 31, 1997.
/s/ ERNST & YOUNG LLP
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