UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2007
DETTO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 333-100241 01-656333
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
14320 NE 21st Street, Bellevue, Washington 98007
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(Address of principal executive
offices) (Zip Code)
Registrant's telephone number, including area code: (425) 201-5000
Not applicable
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
This Form 8-K and other reports filed by Detto Technologies, Inc.
("Detto" or the "Company") from time-to-time with the Securities and Exchange
Commission (collectively, the "Filings") contain forward-looking statements and
information that are based upon beliefs of, and information currently available
to, the Company's management, as well as estimates and assumptions made by the
Company's management. When used in the Filings, the words "anticipate,"
"believe," "estimate," "expect," "future," "intend," "plan" or the negative of
those terms and similar expressions as they relate to the Company or the
Company's management identify forward-looking statements. Such statements
reflect the current view of the Company with respect to future events and are
subject to risks, uncertainties, assumptions and other factors relating to the
Company's industry, operations and results of operations and any businesses that
may be acquired by the Company. Should one or more of those risks or
uncertainties materialize, or should the underlying assumptions prove incorrect,
actual results may differ significantly from those anticipated, believed,
estimated, expected, intended or planned.
This Form 8-K/A amends the Form 8-K filed by the Company on June 4,
2007.
Item 4.01 Changes in Registrant's Certifying Accountant.
On February 9, 2007, Williams & Webster, P.S. (the "Former Accountant")
was dismissed as the Company's independent auditor and independent registered
public accountant. The Former Accountant audited the Company's consolidated
balance sheets as of December 31, 2005 and 2004 and the related consolidated
statements of operations, stockholders' deficit and cash flows for the years
then ended. The report of the Former Accountant on the financial statements for
those periods contained no adverse opinion or disclaimer of opinion and was not
modified as to uncertainty, audit scope or accounting principles except that it
included an explanatory paragraph stating that the financial statements had been
prepared assuming that the Company would continue as a going concern and that
there was substantial doubt about its ability to continue as a going concern.
The decision to dismiss the Former Accountant was approved by the Company's
Audit Committee.
During the fiscal years ended December 31, 2005 and 2004, and through
the date of this report, the Former Accountant did not advise the Company that
(i) internal controls necessary to develop reliable financial statements did not
exist, (ii) information had come to the attention of the Former Accountant which
made the Former Accountant unwilling to rely on management's representations or
(iii) the scope of an audit should be expanded significantly. However, without
any prior consultation with the Company, on April 20, 2007, the Former
Accountant delivered an undated letter to the Company stating that, based on
information from a former member of the Company's Board of Directors, "the
financial statements as filed with the Securities and Exchange Commission are
misstated, and therefore we are withdrawing our audit reports for 2004 and
2005." Upon receipt of the letter, the Company's Chief Financial Officer and
others contacted the Former Accountants in an attempt to determine the specific
reasons why it believed that the financial statements were "misstated." As a
result of those contacts, the Company determined that the source of the
"misstatement" was a 2004 transaction with Alista Technologies, Inc. in which
the Company recognized revenue of $1 million as a result of a payment of notes
payable with an offset to a cancelled receivable under a licensing agreement
(the "Alista Transaction"). Although the Former Account had previously reviewed
the accounting for the Alista Transaction without objection as part of its audit
reports for 2004 and 2005, it was now stating that because Alista Technologies,
Inc. fell under the variable interest entity portion of FASB Interpretation 46,
it should have been "consolidated" with the Company, thus eliminating the
revenue (the "Revised Alista Accounting Treatment"). In response to the Former
Accountant's new position, the Company advised the Former Accountant that it
disagreed with the Revised Alista Accounting Treatment and provided the Former
Accountant with information indicating that FASB Interpretation 46 was not
applicable. After providing that information, the Company attempted to engage
the Former Accountant in a discussion as to the basis for the Revised Alista
Accounting Treatment; however, the Former Accountant failed to respond in a
meaningful manner and then advised the Company that it will no longer respond to
its communications. As a result, there has been no opportunity for the Company's
Board of Directors or any committee thereof to resolve the Company's
disagreement as to the Revised Alista Accounting Treatment with the Former
Accountant.
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The Company has provided the Former Accountant with a copy of the
foregoing disclosures and requested in writing that the Former Accountant
furnish it as promptly as possible with a letter addressed to the Securities and
Exchange Commission ("SEC") stating whether or not it agrees with such
disclosures (and, if not, the respects in which it does not agree). A copy of
the Former Accountant's response letter is attached as Exhibit 16 to this Form
8-K/A.
Effective May 22, 2007, the Company engaged Peterson Sullivan, PLLC
(the "Successor Accountant") as its independent auditor and independent
certified public accountant for the fiscal year ended December 31, 2006. The
decision to engage the Successor Accountant was approved by the Company's Audit
Committee. The Company replaced the Former Accountant for reasons unrelated to
the Revised Alista Accounting Treatment. The Company has consulted the Successor
Accountant regarding whether the Revised Alista Accounting Treatment was
appropriate and has been orally advised by the Successor Accountant that the
original accounting treatment of the Alista Transaction was correct; as a
result, the financial statements for the fiscal years ended December 31, 2005
and 2004 are not "misstated" in that regard. The Company has authorized the
Former Accountant to respond fully to the inquiries of the Successor Accountant
concerning the Revised Alista Accounting Treatment.
The Company provided the Successor Accountant with the foregoing
disclosures prior to filing of this Form 8-K and requested that it review those
disclosures. The Company has provided the Successor Accountant with the
opportunity to furnish the Company with a letter addressed to the SEC containing
any new information, clarifying the Company's expression of the Successor
Accountant's views, or stating any respects in which it does not agree with such
disclosures in this Form 8-K. A copy of any such letter will be filed as an
exhibit to an amendment to this Form 8-K.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
In connection with the circumstances described in Item 4.01 above, the
Company's Former Accountant has advised it that disclosure should be made to
prevent future reliance on previously issued audit reports related to the
financial statements for the fiscal years ended December 31, 2005 and 2004. See
Item 4.01 for additional information. The Company has provided the Former
Accountant with a copy of the foregoing disclosures and requested in writing
that the Former Accountant furnish it as promptly as possible with a letter
addressed to the SEC stating whether or not it agrees with such disclosures
(and, if not, the respects in which it does not agree). A copy of the Former
Accountant's response letter is attached as Exhibit 16 to this Form 8-K/A.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Effective on May 3, 2007, Pablo Perez-Fernandez resigned as the
Company's Co-Chief Executive Officer and as a director of the Company. Neither
resignation was the result of a disagreement with the Company. As a result of
those resignations, Larry Mana'o remains as the Company's sole Chief Executive
Officer.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following Exhibit is attached hereto:
Number Description
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16 Letter of Williams & Webster, P.S. dated June 14, 2007.
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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.
DETTO TECHNOLOGIES, INC.
Date: June 19, 2007 By: /s/ Larry Mana'o
Larry Mana'o, Chief Executive Officer
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