SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to section 13 of 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 1998
Network Six, Inc.
(Exact name of registrant as specified in its charter)
Commission File No. 0-21038
Rhode Island 05-036-6090
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
475 Kilvert Street, Warwick, Rhode Island 02886
(Address of principal executive offices, including zip code)
(401) 732-9000
(Registrant's telephone number, including area code)
Item 4. Changes in Registrant's Certifying Accountant
On January 6, 1998, the Registrant engaged the firm of Sansiveri,
Kimball & McNamee, LLP ("SKM"), as its certifying accountant. Before the
engagement, neither the Registrant nor anyone on its behalf (i) consulted with
the newly engaged accountant regarding the application of accounting principles
to a specific completed or contemplated transaction or the type of audit opinion
that might be rendered on the Registrant's financial statements, or (ii) had
been provided with advice that was an important factor considered by the
Registrant in reaching a decision as to an accounting, auditing or financial
reporting issue. The decision to engage SKM was approved by the Audit Committee
of the Board of Directors of the Registrant.
On January 6, 1998, the Registrant terminated, with the concurrence of
its Audit Committee, its relationship with its certifying accountant KPMG Peat
Marwick LLP ("KPMG"). KPMG included in its Independent Auditors' reports dated
March 28, 1997 and April 1, 1996 a statement that the accompanying financial
statements had been prepared assuming that the Company will continue as a going
concern. In addition, during the audit of the Company's financial statements for
the year ended December 31, 1996, KPMG concluded approximately $1.8 million of
revenue recognized on the registrant's contract with the State of Hawaii during
the first three quarters of 1996 should not have been recognized and should have
been reversed in the respective Quarters. The Registrant believes that the
revenue was
properly and correctly recognized and that there is no reason that it should
have known, during the first three quarters of 1996, under applicable accounting
standards that the revenue should not have been recognized at the time.
Moreover, when the Registrant had reason to know that revenue under the contract
should not be recognized because of changed conditions, such revenue was
reversed in the fourth quarter of 1996 and for the year ended December 31, 1996.
The Registrant has requested KPMG furnish the Registrant with a letter
addressed to the SEC stating whether or not KPMG agrees with the above
statements. A copy of such letter will be filed as an exhibit to this current
Report on Form 8-K.
Item 7. Exhibits
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16.01* Letter regarding Change in Certifying Accountant from
KPMG Peat Marwick LLP, independent auditors.
[*To be filed by amendment.]
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 thereunto duly authorized.
Network Six, Inc.
By: /s/ Dorothy M. Cipolla
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Dorothy M. Cipolla
Chief Financial Officer