UNITED STATES
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
December 2, 1999
Date of Report (Date of earliest event reported)
SOUND SOURCE INTERACTIVE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-28604 95-4264046
(State or other jurisdiction (Commission (IRS Employer of
incorporation) File Number) Identification No.)
26115 Mureau Road, Suite B, Calabasas, California 91302-3126
(Address of principal executive offices) (Zip Code)
(818) 878-0505
(Registrant's telephone number, including area code)
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Item 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
On November 29, 1999, Deloitte & Touche LLP ("D & T") resigned as the
principal accountant to audit the Company's financial statements. The reports
of D & T on the Company's financial statements for years ended June 30, 1998
and 1999 did not contain any adverse opinion or a disclaimer of opinion, and
were not qualified or modified as to, audit scope, or accounting principles.
D & T's report on the June 30, 1999 financial statements included an
explanatory paragraph regarding the Company's ability to continue as a going
concern.
During the Company's fiscal years ended June 30, 1999 and June 30, 1998, and
the period subsequent to June 30, 1999 preceding D & T's resignation, there
was no disagreement between the Company and D & T on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to the satisfaction of D & T,
would have caused D & T to make a reference to the subject matter of the
disagreement in connection with its report on the Company's financial
statements.
By letter dated September 10, 1999 (the "Management Letter"), D & T advised
the Company and the Audit Committee of the Company's Board of Directors that
in planning and performing their audit for the year ended June 30, 1999, they
had noted certain matters involving the Company's internal controls and its
operations that they considered to be material weaknesses under standards
established by the American Institute of Certified Public Accountants.
Material weaknesses involve matters coming to their attention in which the
design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements caused by error
or fraud in amounts that would be material in relation to the financial
statements being audited may occur and not be detected within a timely period
by employees in the normal course of performing their assigned functions. The
following material weaknesses were noted in the Management Letter: production
and distribution contracts were not evaluated to determine if the related
prepaid royalty asset was realizable; and the recoverability of inventory was
not adequately evaluated, and the related inventory reserves were not
appropriately adjusted as necessary.
The Audit Committee of the Company's Board of Directors discussed each of the
material weaknesses described in the Management Letter with D & T. The
Company did not disagree with D & T's identification of material weaknesses.
The Company has not selected a successor accountant to audit the Company's
financial statements. However, the Company has authorized D & T to respond
fully to the inquiries of the successor accountant, when selected, regarding
the matters addressed in the Management Letter.
D & T has furnished to the Company a letter addressed to the Securities and
Exchange Commission concerning the information contained in this 8-K, a copy
of which is attached as Exhibit 16.1.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 16.1 Letter from Deloitte & Touche LLP dated December 2,
1999, pursuant to Item 304(a)(3)
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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.
Sound Source Interactive, Inc.
By: /s/ Jeffrey Court
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Jeffrey Court, Vice President of
Finance and Acting Chief
Financial Officer
Date: December 2, 1999
December 2, 1999
Securities and Exchange Commission
Mail Stop 11-3
450 5th Street, N.W.
Washington, D.C. 20549
Dear Sirs/Madams:
We have read and agree with the comments in Item 4, except for the third
sentence of the fourth paragraph as to which we have no basis to agree or
disagree, of Form 8-K of Sound Source Interactive, Inc. dated December 2,
1999.
Yours truly,
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Los Angeles, California
