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): February 21, 2007
Island Pacific, Inc.
(formerly known as SVI Solutions, Inc.)
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-23049 33-0896617
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(Commission File Number) (IRS Employer Identification No.)
19800 MacArthur Boulevard, Suite 1200, Irvine, California 92612
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(Address of Principal Executive Offices) (Zip Code)
(949) 476-2212
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 4.01 CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
(a) Previous Independent Registered Public Accounting Firm.
(i) On February 13, 2007, the Company's Audit Committee made a
recommendation, which the Company's board of directors approved, to dismiss
Singer Lewak Greenbaum & Goldstein LLP ("SLGG") as its independent registered
public accounting firm. On February 15, 2007, before the Company notified SLGG
of its decision and filed a Current Report on Form 8-K, the Company received a
letter from SLGG advising the Company that it has resigned, effective
immediately, as the Company's independent accountants and auditors and that it
would cease providing audit services to the Company in connection with the audit
of its fiscal year ending March 31, 2005, and will not opine on the opening
balance sheet of Retail Technologies, Inc. as of June 1, 2004.
(ii) In its letter of resignation, SLGG advised the Company it recently
has been made aware of information concerning items addressed in previous audits
that it believes conflicts with information and representations presented by the
Company at the time of the audits. SLGG stated it believes the information it
received at the time of the audits was incomplete or misleading and, as a
result, reliance can no longer be placed on its audit opinions for the fiscal
years ending March 31, 2002, 2003 and 2004. In addition, SLGG withdrew its
auditor's reports on the Company's financial statements for the same time
periods.
(iii) The Company has not discussed with SLGG the issues raised by its
letter of resignation. On February 16, 2007, the Company filed a Complaint in
the Superior Court of California, County of Orange against SLGG alleging, INTER
ALIA, that SLGG negligently performed its audits of the Company and failed to
undertake proper audits.
(iv) From mid-to-late 2006, the Company made separate presentations to
SLGG detailing its proposed accounting treatment related to revenue recognition,
accounting for certain convertible debt, and discontinued operations. SLGG had
an initial difference of opinion on each presentation and proposed accounting
treatment, and the Company resolved the issues in favor of SLGG.
(v) Except as described in this Item 4.01(a)(i) through (iv), for the
fiscal year ending March 31, 2004, and in the subsequent interim periods
preceding the resignation of SLGG, there have been no disagreements (as
described in Regulation S-K Item 304(a)(1)(iv)) with SLGG on any matter of
accounting principles or practices, financial statement disclosure or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
SLGG, would have caused SLGG to make reference thereto in its report on the
financial statements for such years. The Company has filed a Complaint alleging,
INTER ALIA, that SLGG negligently performed its audits and, as a result of the
pending litigation, SLGG may believe or allege that there have been
disagreements other than those described by the Company in this Form 8-K.
(vi) On October 25, 2004, upon having been advised by SLGG, the
Company filed a report on Form 8-K announcing that it would be restating its
financial statements for the fiscal years ended March 31, 2003 and March 31,
2004, and its quarterly financial statements for the second and third quarters
of the fiscal year ended March 31, 2003, the first, second, and third quarters
of the fiscal year ended March 31, 2004, and the first quarter of the fiscal
year ending March 31, 2005, and that such financial statements should not be
relied upon. The Company later determined that restating the financial
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statements for the fiscal year ending March 31, 2003 was unnecessary because any
adjustments would be immaterial. On November 16, 2004, February 8, 2005 and
February 10, 2005, the Company filed amended reports for the remaining periods
at issue. Except as described in this Item 4.01(a)(vi), for the fiscal year
ending March 31, 2004, and in the subsequent interim periods preceding the
resignation of SLGG, the Company did not have any reportable events (as
described in Regulation S-K Item 304(a)(1)(v)).
(vii) The Company has authorized SLGG to respond fully to the inquiries
of Goldman & Parks, LLP as its successor accountant concerning the subject
matter of the events described in this Item 4.01(a).
(viii) The Company has requested that SLGG furnish it with a letter
addressed to the Securities and Exchange Commission stating whether or not it
agrees with the above statements and, if not, stating the respects in which SLGG
does not agree. The Company will amend this report in accordance with Item
4.01(a) of Form 8-K to file the independent accountant's letter required by such
item.
(b) New Independent Registered Public Accounting Firm.
(i) On February 13, 2007, the Company, acting on the recommendation of
the Company's Audit Committee, approved the appointment of Goldman & Parks, LLP
as the Company's independent registered public accounting firm. Goldman & Parks,
LLP was formally retained on February 20, 2007. During the Company's two most
recent fiscal years, the Company has not consulted with Goldman & Parks, LLP on
any matters described in Regulation S-K Item 304(a)(2)(i) or (ii).
ITEM 4.02(b) NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW
(i) On February 15, 2007, SLGG advised the Company that it has
resigned, effective immediately, as the Company's independent accountants and
auditors. In its letter of resignation, SLGG stated to the Company it recently
has been made aware of information concerning items addressed in previous audits
that conflict with information and representations presented by the Company at
the time of the audits. SLGG stated it believes the information it received from
the Company at the time of the audits was incomplete or misleading information
and, as a result, reliance can no longer be placed on its audit opinions for the
fiscal years ending March 31, 2002, 2003 and 2004.
(ii) The Company has not discussed with SLGG the issues raised by its
letter of resignation. On February 16, 2007, the Company filed a Complaint in
the Superior Court of California, County of Orange against SLGG alleging, INTER
ALIA, that SLGG negligently performed its audits of the Company and failed to
undertake proper audits.
(iii) On February 13, 2007, the Audit Committee of the Company's Board
of Directors, after consulting with SLGG, the Company's former independent
accounting firm, concluded that as a result of the ongoing investigation by the
Securities and Exchange Commission on certain accounting issues, as previously
disclosed by the Company, disclosure should be made because certain of its
amended reports should no longer be relied upon. These reports are as follows:
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o 10-K/A for the fiscal year ended March 31, 2004;
o 10-Q/A for the fiscal quarter ended December 31, 2002;
o 10-Q/A for the fiscal quarter ended June 30, 2003;
o 10-Q/A for the fiscal quarter ended September 30, 2003;
o 10-Q/A for the fiscal quarter ended December 31, 2003;
o 10-Q/A for the fiscal quarter ended June 30, 2004;
o 10-Q/A for the fiscal quarter ended September 30, 2004; and
o 10-Q/A for the fiscal quarter ended December 31, 2004
(iv) In reviewing these financial statements, the Company determined
that prior presentation was incorrect and, therefore, the financial statements
need to be restated based on the following deficiencies and issues:
1. Deferral of revenues and cost of revenues to periods when the
earnings process is completed;
2. Accounting for derivative liability treatment of warrants and
certain other embedded derivatives associated with convertible
debt; and
3. Correction of the opening balance sheet related to the
acquisition of Retail Technologies International, Inc.,
affecting the reporting periods after the date of the
acquisition, or June 1, 2004.
(v) The Company's management and chair of the Audit Committee discussed
with SLGG the matters disclosed in this Item 4.02(b)(iii) and (iv).
(vi) The Company has requested that SLGG furnish it with a letter
addressed to the Securities and Exchange Commission stating whether or not it
agrees with the above statements. The Company will amend this report in
accordance with Item 4.02(c) of Form 8-K to file the independent accountant's
letter required by such item.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibit No. Description
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16.1 SLGG Resignation Letter dated February 15, 2007
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 hereto duly authorized.
Island Pacific, Inc.
Date: February 21, 2007 By: /s/ Barry Schechter
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Name: Barry Schechter
Title: Chief Executive Officer