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): September 1, 2005
PPOL,INC.
(Exact name of registrant as specified in its charter)
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CALIFORNIA |
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000-50065 |
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95-4436774 |
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(State or other |
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(Commission File |
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(I.R.S. Employer |
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1 City Boulevard West, Suite 820 |
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Orange, California |
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92868 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (714) 937-3211
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of registrant under any of the following provisions (See General Instruction A.2 below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 4.01 Changes in Registrant’s Certifying Accountant.
The registrant’s auditors, Stonefield Josephson, Inc. (“Stonefield Josephson”), by letter dated September 1, 2005, have notified the registrant that it will not stand for re-election as the registrant’s auditors and that its client-auditor relationship with the registrant will cease upon the completion of its review of the financial statements to be included in registrant’s Form 10-Q for the period ended June 30, 2005.
As previously reported, the registrant was not able to file timely its annual report on Form 10-K for the fiscal year ended March 31, 2005, as the registrant and Stonefield Josephson had not completed their annual audit by the filing deadline.
On March 31, 2005, PPOL, Inc. (PPOL) sold its entire interest in Gatefor, Inc. (Gatefor), it’s wholly owned subsidiary, to Forval Corporation (Forval). Forval was PPOL’s majority shareholder at that time. The registrant initially accounted for the sale in substantial accordance with FAS 144, paragraph 43, included a one line item on the statement of operations as ““Gain from operations of discontinued Gatefor component (including gain on disposal of $929,800).” Based upon management’s subsequent discussions with Stonefield Josephson, it was mutually agreed upon that the proper accounting treatment for this transaction was as a capital contribution as opposed to a gain. This conclusion was based upon the significant factor that the sale transaction was with the registrant’s then majority shareholder.
Stonefield Josephson has advised the registrant that difference in accounting treatment discussed above was a “disagreement” as defined in Item 304 of Regulation S-K. The Registrant’s Board of Directors have discussed the foregoing and have authorized Stonefield Josephson to respond fully to the inquiries of the registrant’s successor auditor.
Stonefield Josephson also reported to the Board that the registrant’s overall staffing in the United States and Japan appear not to be sufficient for a public reporting company. Specifically, Stonefield Josephson noted that during the course of the audit, the Japanese staff was not sufficient to provide documents, schedules and analysis in a timely manner. As for the registrant’s staff in the United States, Stonefield Josephson noted the registrant’s staff in the United States had limited involvement with the audit in Japan to determine whether accounting issues were proper in accordance with Generally Accepted Accounting Principals. Stonefield Josephson noted that some of these issues were addressed when it resumed its fieldwork in the United States.
Stonefield also noted that the initial drafts of the financial statements were not in accordance with Generally Accepted Accounting Principals, as the auditors made many revisions to the draft financial statements, and Stonefield Josephson advised that the registrant’s Japanese subsidiary needed to retain historical documents for a period of at least seven (7) years.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: September 9, 2005
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PPOL, Inc. |
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By: |
/S/ Richard H. Izumi |
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Richard H. Izumi |
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Chief Financial Officer and Secretary |
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