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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) October 25, 1999
PREFERRED NETWORKS, INC.
(Exact name of Registrant as Specified in its Charter)
Georgia 0-27658 58-1954892
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification
Number)
850 Center Way, Norcross, GA 30071
(Address of principal executive offices)
(Zip Code)
(770) 582-3500
(Registrant's telephone number including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last year)
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Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) Previous independent auditors
(i) On October 25, 1999, Ernst & Young LLP
("E&Y") resigned as the Registrant's
independent auditors by delivering a letter
to the Registrant informing the Registrant
of the cessation of the client-auditor
relationship between the Registrant and E&Y.
(ii) The reports of E&Y on the Registrant's
consolidated financial statements for the
past two years, the most recent of which is
the fiscal year ended December 31, 1998,
contained no adverse opinion or disclaimer
of opinion and were not qualified or
modified as to audit scope or accounting
principles. However, their report for the
fiscal year ending December 31, 1998
includes an explanatory paragraph that
describes the uncertainty over the
Registrant's ability to continue as a going
concern as described in Note 2 to the
consolidated financial statements.
(iii) In connection with the audits of the
Registrant's consolidated financial
statements for each of the two most recent
fiscal years, and in the subsequent interim
period, there have been no disagreements
with E&Y on any matter of accounting
principles or practices, financial statement
disclosure, or auditing scope or procedures,
which disagreements if not resolved to the
satisfaction of E&Y would have caused them
to make reference thereto in their report on
the Registrant's consolidated financial
statements.
(iv) The Registrant has requested and E&Y has
furnished the Registrant with a letter
addressed to the Securities and Exchange
Commission stating that it agrees with the
above statements. A copy of this letter is
included as an exhibit to this Form 8-K.
(b) New independent accountants
The Registrant is currently seeking a firm to serve
as its principal independent accountants and intends
to have a successor firm engaged not later than
December 31, 1999, the end of its current fiscal
year.
Item7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
16.1 Letter from Ernst & Young LLP dated October 27,
1999.
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SIGNATURE
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.
PREFERRED NETWORKS, INC.
Date: October 27, 1999 By: /s/ Kathryn Loev Putnam
----------------------------------
Senior Vice President and Chief
Financial Officer
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EXHIBIT 16.1
[LETTERHEAD OF ERNST & YOUNG LLP]
October 27, 1999
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
RE: Preferred Networks, Inc.
Commission File Number 0-27658
Ladies and Gentlemen:
We have read Item 4 of Form 8-K dated October 25, 1999, of Preferred Networks,
Inc. and are in agreement with the statements contained in paragraphs (a)(i),
(ii), (iii) and (iv) contained therein. We have no basis to agree or disagree
with other statements of the Registrant contained therein.
/s/ Ernst & Young LLP
