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
March 27, 2002
Date of Report (date of earliest event reported)
ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
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(Exact Name of Registrant as Specified in its Charter)
California 0-11038 33-0644381
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(State or Other (Commission (IRS Employer Iden-
Jurisdiction of File Number) tification Number)
Incorporation)
10675 Sorrento Valley Road, Suite 200
San Diego, California 92121
(Address of Principal Executive Offices
Including Zip Code)
(858) 450-7600
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(Registrant's Telephone Number,
Including Area Code)
Item 4. Changes in Registrant's Certifying Accountants.
On July 26, 2001, the Audit Committee recommended and the Board of
Directors of Advanced Remote Communication Solutions, Inc. ("ARCOMS") approved
the engagement of KPMG LLP ("KPMG") as the Company's independent accountants
replacing Deloitte and Touche LLP.
ARCOMS determined that the cost of the audit of the Company's financial
statements for the year ended December 31, 2001, which was in progress, had
become excessive. On March 20, 2002, the Audit Committee, following mutual
agreements between KPMG and the Company's management and discussions between
the Audit Committee and KPMG, recommended and the Board of Directors of ARCOMS
approved the dismissal of KPMG as the Company's independent accountants prior
to completion of the audit of ARCOMS.
In connection with the audits of the Company's financial statements for
the previous years ended December 31, 2000, 1999 and 1998 and in the subsequent
interim period ended March 31, 2001, there were no disagreements with Deloitte
and Touche LLP on any matter of accounting principles or practices, financial
statement disclosure or auditing scope or procedures.
In connection with the uncompleted audit of the year ended December 31,
2001 and review of the interim periods ended June 30, 2001 and September 30,
2001, there were no disagreements with KPMG on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedures. Nor, except to the extent discussed below, were there any reportable
events within the meaning of Item 304 (a) (1) (v) of Regulation S-K for the
interim periods ended June 30, 2001 and September 30, 2001, and the fiscal year
ended December 31, 2001 and through the date of this report.
In March 2002, KPMG informed management and the Audit Committee that
information has come to its attention during the audit related to capitalized
software and revenue recognition on licensing agreements, that if further
investigated may materially impact the fairness or reliability of the Company's
2001 financial statements. Due to the dismissal of KPMG, further investigation
was not performed. The Company believes its accounting for capitalized software
and revenue recognition on licensing agreements is consistent with prior
periods.
In a letter dated March 20, 2002, KPMG informed the Company that they
noted certain matters involving the Company's internal controls and its
operations that they considered to be reportable conditions under standards
established by the American Institute of Certified Public Accountants ("AICPA").
The reportable conditions are related to:
(a) timely performance of account analysis; and
(b) the design and operation of internal controls in place related to
the documentation and communication of establishing technological
feasability in connection with Statement of Financial Accounting Standards
No. 86.
The accountant's reports of Deloitte and Touche LLP on the financial
statements of the Company did not contain any adverse opinion or disclaimer of
opinion, nor were they qualified to audit scope, or accounting principles;
however, the accountant's report for the year ended December 31, 2000 included
an explanatory paragraph as to the uncertainty that ARCOMS would continue as a
going concern.
A letter addressed to the Securities and Exchange Commission from KPMG
is included as Exhibit 16 to this Form 8-K.
The Company has not consulted with any other independent auditors
regarding either: (i) the application of accounting principles to a specified
transaction, either completed or proposed; or (ii) the type of audit opinion
that might be rendered on the Company's financial statements.
On March 21, 2002 the Audit Committee recommended and the Board of
Directors of ARCOMS approved the engagement of Singer Lewak Greenbaum &
Goldstein LLP as the Company's independent accountants for the year ended
December 31, 2001 replacing KPMG
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
Not applicable
(b) Pro Forma Financial Information.
Not applicable
( c) Exhibits
Exhibit
Number Description
16. Letter from former accountant, KPMG LLP to the Securities and Exchange
Commission.
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.
Dated: March 27, 2002
ADVANCED REMOTE COMMUNICATION SOLUTIONS, INC.
BY: /S/ MICHAEL SILVERMAN,
CHAIRMAN OF THE BOARD
PRESIDENT, CHIEF OPERATING OFFICER
EXHIBIT 16
March 27, 2002
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously engaged as principal accountants to audit the consolidated
financial statements of Advanced Remote Communications Solutions, Inc; however,
we have not reported on the consolidated financial statements of Advance Remote
Communications Solutions, Inc. for any periods. On March 20, 2002 our
appointment as principal accountants was terminated. We have read Advanced
Remote Communication Solutions, Inc.'s statements included under Item 4 of its
Form 8-K dated March 27, 2002, and we agree with such statements as they relate
to our firm and the period subsequent to our engagement as principal accountants
except that we are not in a position to agree or disagree with Advanced Remote
Communications Solutions, Inc.'s statements that: i) the Audit Committee
recommended and the Board of Directors of Advanced Remote Communication
Solutions, Inc. approved the dismissal of KPMG as the Company's independent
accountants prior to completion of the audit of ARCOMS; ii) ARCOMS determined
that the cost of the audit of the Company's financial statements for the year
ended December 31, 2001 had become excessive; iii) the Company's belief that its
accounting for capitalized software and revenue recognition on licensing
arrangements is consistent with prior periods; iv) the Company has not consulted
with any other independent auditors regarding the application of accounting
principles to a specified transaction or the type of audit opinion that might be
rendered on Advance Remote Communications Solutions, Inc.'s consolidated
financial statements, and v) on March 21, 2002 the Audit Committee recommended
and the Board of Directors of ARCOMS approved the engagement of Singer Lewak
Greenbaum & Goldstein LLP ("SLGG") as the Company's independent accountants for
the year ended December 31, 2001 replacing KPMG. Additionally, we believe the
penultimate sentence of the fifth paragraph should read "Due to the dismissal of
KPMG, further investigation was not performed and the matter has not been
resolved to KPMG's satisfaction." Additionally, we do not agree with the
registrant's statement in the second paragraph that the dismissal occurred
"following mutual agreement between KPMG and the Company's management." Finally,
we make no comment with respect to any of the statements relating to Deloitte &
Touche LLP in Item 4 of this Form 8-K.
Very truly yours,
/s/ KPMG LLP
KPMG LLP
San Diego, CA