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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): AUGUST 19, 1998
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C-ATS SOFTWARE INC.
(Exact name of registrant as specified in its charter)
DELAWARE 0-25526 77-0185
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(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
1870 EMBARCADERO ROAD
PALO ALTO, CALIFORNIA 94303
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (650) 321-3000
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) Effective August 19, 1998, C-ATS Software Inc., a Delaware corporation
(the "Registrant"), dismissed Arthur Andersen LLP as its independent public
accountants. The decision to dismiss Arthur Andersen LLP was made because
the Registrant and Arthur Andersen LLP intend to enter into a material
business relationship involving product marketing and distribution which
creates a potential independence conflict as it relates to the Registrant.
The dismissal of Arthur Andersen LLP was recommended by the Audit Committee
of, and approved by, the Board of Directors of the Registrant effective
August 19, 1998.
Arthur Andersen LLP's report on the financial statements of the
Registrant for each of the last two fiscal years ended December 31, neither
contained an adverse opinion or a disclaimer of opinion, or was qualified or
modified as to uncertainty, audit scope, or accounting principles.
During the Registrant's two most recent fiscal years and the interim
period through August 19, 1998, there were no disagreements on any matter of
accounting principles or practices, financial statement disclosure, or
auditing scope of procedure and there were no "reportable events" with Arthur
Andersen LLP as described in Items 304 (a)(1)(iv) and (v) of Regulation S-K,
respectively.
Accordingly, Arthur Andersen LLP has not advised the Registrant of (i)
the absence of the internal controls necessary for the Registrant to develop
reliable financial statements; (ii) any information which would cause Arthur
Andersen LLP to no longer rely on management's representations, or that would
cause Arthur Andersen LLP to be unwilling to be associated with the financial
statements prepared by management; (iii) any need to expand significantly the
scope of its audit, or any information that if further investigated may (a)
materially impact the fairness or reliability of either a previously issued
audit report or the underlying financial statements, or any financial
statements for any fiscal period subsequent to the date of the most recent
financial statements covered by an audit report or (b) cause it to be
unwilling to rely on management's representations or be associated with the
registrant's financial statements; (iv) any action, due to the dismissal of
Arthur Andersen LLP or otherwise, not to the expand the scope of its audit
or conduct further investigation; and (v) any information that has come to
the attention of Arthur Andersen LLP that it has concluded materially impacts
the fairness or reliability of either (a) a previously issued audit report or
the underlying financial statements, or (b) any financial statements issued
or to be issued covering any fiscal period subsequent to the date of the most
recent financial statements covered by an audit report.
(b) On August 19, 1998, the board of directors of the Registrant engaged the
accounting firm of KPMG Peat Marwick, LLP as principal accountants of the
Registrant for the fiscal year ended December 31, 1998. Neither the
Registrant nor any of its subsidiaries has consulted KPMG Peat Marwick, LLP
during the Registrant's two most recent fiscal years and the interim period
through August 19, 1998.
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Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
16.1 Letter regarding change in certifying accountant
from Arthur Andersen LLP to the Securities
Exchange Commission.
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.
C-ATS SOFTWARE INC.
Date: August 26, 1998 By: /s/ James E. Graber
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James E. Graber
Chief Financial Officer and Treasurer
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EXHIBIT 16.1
[LETTERHEAD OF ARTHUR ANDERSEN LLP]
August 26, 1998
Office of the Chief Accountant
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir/Madam:
We have read Item 4 included in the Form 8-K dated August 26, 1998 of C-ATS
Software Inc. to be filed with the Securitues and Exchange Commission and are
in agreement with the statements contained therein.
Very truly yours,
/s/ Arthur Andersen LLP
Copy to: Mr. James E. Graber
