SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of
Report (Date of earliest event reported) June 2, 2006
SKYE INTERNATIONAL, INC.
(Exact
name of registrant as specified in its charter)
|
Nevada
(State
or other jurisdiction of incorporation)
|
000-27549
(Commission
File
Number)
|
88-0362112
(IRS
Employer Identifica-tion
No.)
|
7150
West Erie Street, Chandler, Arizona 85226
(Address
of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code (480)
889-9999
Not
applicable
(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))
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Introductory
Note:
This
amended Current Report on Form 8-K/A amends the disclosures made in the initial
report on that form filed by Skye International, Inc. (“Skye” or the “Company”)
on June 7, 2006 (the “Original 8-K”). The remaining portions of the Original 8-K
are not intended to be affected by this filing.
Item
4.01. Changes in Registrant’s Certifying Accountant.
Skye
was
advised on June 2, 2006 after the close of business that its independent
auditors, Semple & Cooper, LLP, were resigning their engagement to audit the
financial statements of the Company for 2005. That resignation was effective
on
June 2, 2006. A copy of their resignation letter is attached as Exhibit 16.1
to
this filing.
On
June
2, 2006, the Company has engaged the firm of Moore and Associates, Chartered,
to
audit the financial statements of the Company for 2004 and 2005, subject to
approval of the Audit Committee, which subsequently approved the engagement
on
June 3, 2006.
During
the registrant’s two most recent fiscal years and through June 2, 2006, the date
prior to the engagement of Moore and Associates, neither the Company nor anyone
on its behalf consulted Moore and Associates regarding 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 registrant’s
consolidated financial statements.
The
resignation of Semple & Cooper was accepted, but was not encouraged or
recommended, by Skye’s Board of Directors and Audit Committee. As noted above,
the engagement of Moore and Associates has been approved by both the Skye Board
and Audit Committee.
On
June
13, 2006, Semple & Cooper provided the Company with a letter to the SEC
dated June 9, 2006. A copy of that letter is filed with this Current Report
as
Exhibit 16.2. That letter noted certain issues that if further investigated
might materially impact the fairness or reliability of the financial statements
of the Company for 2004 and 2005. In particular, the auditors noted the receipt
of a letter from an attorney representing certain shareholders that contained
allegations of financial and accounting improprieties and accusations of
possible bankruptcy and securities fraud. The Board of Directors had not
concluded its investigation of those allegations at the time Semple & Cooper
resigned.
The
matters noted in that letter are the subject of litigation commenced in May
2006
against the Company and certain of its officers, directors and shareholders,
in
the US District Court for the District of Arizona, case number:
CV06-1291-PHX-ROS by what appears to be essentially the same group of
shareholders. That complaint, which was filed approximately one week after
the
Company received the letter noted above, is filed as a derivative action,
purportedly on behalf of the Company, and seeks certain injunctive and
declaratory relief. In connection with that action, the plaintiffs sought the
granting of a temporary restraining order to prevent certain corporate or
shareholder actions. Among the causes of action, the complaint and the motion
for the temporary restraining order are seeking to prevent the holding of a
shareholder’s meeting originally called for May 31, 2006, which meeting was
previously postponed indefinitely by the board before the suit was filed. The
plaintiffs also are seeking to prevent implementation of a shareholder consent
that seeks to elect 5 board members and approve the engagement of Semple &
Cooper, LLP as auditors, and to nullify the effect of certain issuances of
securities that allegedly were not lawful. The complaint also seeks the removal
of certain corporate officers. The court granted a temporary restraining order
at the initial hearing until the parties had an opportunity to more fully brief
the relevant issues. The parties later stipulated to maintain the status quo
pending further hearings and the temporary restraining order was
vacated.
Semple
& Cooper also noted that it had questions regarding the propriety of certain
arrangements relating to a patent owned by a subsidiary of the Company that
were
not addressed to the auditor’s satisfaction before it resigned. Documentation of
those arrangements was completed after the firm’s resignation. The Board has not
concluded its investigation of the propriety of the transactions and the related
disclosures.
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Semple
& Cooper also noted certain disagreements between their firm and management
relating to the following issues:
|
·
|
the
valuation of common stock and options granted to management and outside
consultants;
|
|
·
|
the
scope of the audit and the determination of materiality with respect
to
certain inventory that had been written off (and for which the company
was
barred from selling pursuant to court order) as well as for certain
furniture and equipment deemed by their firm to be material ;
and
|
|
·
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whether
certain documents supporting certain transactions were authentic
due to
inconsistencies and discrepancies noted by the
auditors.
|
The
Board
and the Audit Committee have not completed their review of those items and
have
not determined whether any changes to the financial statements are warranted
as
a result of those instances. The Company intends to consider those items in
connection with the completion of its financial statements for
2005.
Semple
& Cooper indicated that it has discussed the foregoing issues with the Audit
Committee. The Company does not necessarily agree that those issues were
discussed with the Committee, or in a manner that provided it with an
opportunity to address them. Nevertheless, the Committee will review each of
those matters noted by Semple & Cooper.
The
Audit
Committee has authorized the firm of Semple & Cooper, LLP to respond fully
to the inquiries of the successor accountant concerning the subject matter
of
each disagreement.
There
were no other reportable events or potential disagreements to the Company’s
knowledge as that term is described in Item 304(a)(1)(iv) of Regulation S-B
occurring within the registrant’s two most recent fiscal years and the
subsequent interim period ending June 2, 2006.
The
previous audit report of the Company’s independent auditors for 2004, Shelley
International, CPA on the financial statements as of December 31, 2004 and
for
the two years then ended contained a paragraph stating: “The accompanying
financial statements have been prepared assuming that the company will continue
as a going concern. The Company has experienced losses since inception.
This raises substantial doubt about the Company’s ability to continue as a
going concern. The financial statements do not include any adjustments
that might result from this uncertainty.” The firm of Semple & Cooper did
not issue any reports on the Company’s financial statements, and accordingly
contained no adverse opinions, disclaimers or similar matters.
The
audit
report
of
the Company’s independent auditors for 2004, Moore and Associates on the
financial statements as of December 31, 2004 and for the two years then ended,
which was filed in connection with the restatement of those financial
statements, contained a paragraph stating: “The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 9 to the financial
statements, the Company’s net losses and accumulated deficit of $6,012,643 as of
December 31, 2004 raise substantial doubt about its ability to continue as
a
going concern. Management’s plans concerning these matters are also described in
Note 9. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.”
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Item
9.01
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Financial
Statements and Exhibits
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|
Exhibit
Number
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Document
|
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16.1
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Letter
from Semple & Cooper, LLP dated June 2, 2006.*
|
|
16.2
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Letter
from Semple & Cooper, LLP dated June 9,
2006.
|
*
Previously filed.
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Safe
Harbor
This
report includes forward-looking statements that can generally be identified
by
phrases such as SKYE or its management "believes," "expects," "anticipates,"
"foresees," "forecasts," "estimates" or other words or phrases of similar
import. Similarly, statements in this release that describe our business
strategy, outlook, objectives, plans, intentions or goals also are
forward-looking statements. All forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those in forward-looking statements. Risks and uncertainties
include, but are not limited to: the ability of the Company to bring its SEC
reports current, the ability to obtain listing of the Company’s shares on the
OTC Bulletin Board or any other trading system, general economic conditions
and
conditions in the markets we address; the substantial losses the company has
incurred to date; demand for and market acceptance of new products; successful
development of new products; the timing of new product introductions and product
quality; the company's ability to anticipate trends and develop products for
which there will be market demand; the availability of manufacturing capacity;
pricing pressures and other competitive factors; changes in product mix; product
obsolescence; the ability of our customers to manage inventory; the ability
to
develop and implement new technologies and to obtain protection for the related
intellectual property; the uncertainties of litigation and the demands it may
place on the time and attention of company management; as well as other risks
and uncertainties, including those detailed from time to time in our Securities
and Exchange Commission filings. The forward-looking statements are made only
as
of the date hereof. We undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.
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.
| SKYE INTERNATIONAL, INC. | ||
| |
|
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| Date: June 14, 2006 | By: |  |
|
Gregg C. Johnson |
||
| Title: Secretary | ||
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