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
Date
of
report (Date of earliest event reported): October
28, 2005
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ClearOne
Communications, Inc.
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(Exact
Name of Registrant as Specified in Its
Charter)
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Utah
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(State
or Other Jurisdiction of
Incorporation)
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0-17219
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87-0398877
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(Commission
File Number)
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(IRS
Employer Identification No.)
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1825
Research Way,
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Salt
Lake City, Utah
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84119
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(801)
975-7200
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(Registrant’s
Telephone Number, Including Zip
Code)
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Not
applicable
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(Former
Name or Former Address, if Changed Since Last
Report)
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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:
¨
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
communication pursuant to Rule 13e-4(c) under the Exchange Act
(17
CFR 240.13e-4(c))
Item
4.01 Change in Registrant’s Certifying Accountant.
(a)
Dismissal of previous principal independent accountants.
(i)
On
October 28, 2005, KPMG LLP (“KPMG”) was dismissed as principal accountants for
ClearOne Communications, Inc. (the “Company”) effective upon the completion of
the audit of the Company’s financial statements as of and for the fiscal year
ended June 30, 2004 and the issuance of its report thereon. As discussed below,
the Company has engaged a new principal accountant to audit its financial
statements for the fiscal year ended June 30, 2005.
(ii)
KPMG’s report on the Company’s consolidated financial statements as of and for
the fiscal years ended June 30, 2003 and 2002 did not contain an adverse opinion
or disclaimer of opinion, and was not qualified or modified as to uncertainty,
audit scope or accounting principles, except as follows:
KPMG’s
report on the consolidated financial statements of the Company as of and for
the
years ended June 30, 2003 and 2002 contained a separate paragraph stating “as
discussed in Note 3 to the accompanying consolidated financial statements,
the
consolidated balance sheets as of June 30, 2002 and 2001, and the related
consolidated statements of operations, stockholders’ equity, and cash flows for
each of the years then ended, have been restated” and a separate paragraph
stating “as discussed in Note 2 to the consolidated financial statements, the
Company changed, effective July 1, 2002, its method of accounting for goodwill
and other intangible assets as required by Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, Statement of Financial
Accounting Standard No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets, and Statement of Financial Accounting Standard No. 141,
Business Combinations.”
KPMG
has
not yet issued its report with respect to the Company’s consolidated financial
statements as of and for the fiscal year ended June 30, 2004.
(iii)
The
Audit Committee of the Board of Directors recommended and approved the decision
to change the Company’s principal accountant.
(iv)
In
connection with its audit for the fiscal years ended June 30, 2003 and 2002,
and
during the course of KPMG’s audit of fiscal year ended June 30, 2004 and the
subsequent interim period through October 28, 2005, there were (1) no
disagreements with KPMG on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements, if not resolved to the satisfaction of KPMG, would have caused
KPMG to make reference to the subject matter of the disagreements in connection
with its report, and (2) no events of the type listed in paragraphs (A) through
(D) of Item 304(a)(1)(v) of Regulation S-K, except that KPMG reported in a
letter to the Company's Audit Committee dated August 16, 2005 that during its
audit of the Company's consolidated financial statements as of and for the
fiscal years ended June 30, 2003 and 2002, it noted material weaknesses in
internal controls related to: accounting for revenue recognition and related
sales returns, credit memos, and allowances; accounting for cutoff and
period-end close adjustments related to accrued liabilities and prepaid assets;
the tracking and valuation of inventory; accounting for leases; accounting
for
non-routine transactions; and the lack of personnel with adequate experience
in
preparing financial statements and related footnotes in accordance with GAAP.
The Audit Committee and the Company's management discussed such material
weaknesses in internal controls with KPMG, and the Company has authorized KPMG
to respond fully to the inquiries of the Company’s new principal accountant with
respect thereto.
(iv)
A
letter from KPMG LLP is attached as Exhibit 16.1 to this Form 8-K.
(b)
Engagement of new principal accountants.
(i)
On
October 28, 2005, ClearOne Communications, Inc. (the “Company”) engaged Hansen,
Barnett & Maxwell, A Professional Corporation (“HBM”), as its new principal
accountants to audit the Company’s financial statements for the fiscal year
ended June 30, 2005. The Audit Committee of the Company’s Board of Directors
recommended and approved the engagement of HBM.
(ii)
During the Company’s two most recent fiscal years and through October 28, 2005,
the Company did not consult HBM with respect to (i) the application of
accounting principles to a specified transaction, either completed or proposed;
or the type of audit opinion that might be rendered on the Company's
consolidated financial statements; or (ii) any matter that was either the
subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K
and the related instructions to that Item) or a reportable event (as described
in Item 304(a)(1)(v) of Regulation S-K).
Item
9.01 Financial
Statements and Exhibits.
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Exhibit
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No.
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Title
of Document
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Letter
from KPMG LLP to the U.S. Securities and Exchange Commission dated
November 2, 2005
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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.
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CLEARONE
COMMUNICATIONS, INC.
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Date:
November 2, 2005
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By: /s/ Zeynep Hakimoglu
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Zeynep
Hakimoglu
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Chief
Executive Officer and President
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