UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

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CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

TRANS WORLD ENTERTAINMENT CORPORATION

(Exact Name of Registrant as Specified in Charter)

2818 N. Sullivan Rd. Ste 30

Spokane, WA 99216

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Registrant’s Telephone Number, Including Area Code

38 Corporate Circle,

Albany, New York 12203

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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 (see General Instruction A.2. below):

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

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Item 4.01 Changes in Registrant's Certifying Accountant.

 

 

On June 11, 2020, the Audit Committee of the Board of Directors (the "Audit Committee") of Trans World Entertainment Corporation (the "Company") dismissed KPMG LLP ("KPMG"), which served as the Company's independent registered public accounting firm, until completion of their audit of the Company’s consolidated financial statements as of and for the fiscal year ended February 1, 2020, and the issuance of their report thereon which occurred on June 15, 2020.

 

During the two most recent fiscal years ended February 1, 2020 and February 2, 2019, and subsequent interim period through June 11, 2020, there have been no disagreements (as described in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with KPMG 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 KPMG, would have caused KPMG to make reference to the subject matter of the disagreement in connection with its reports on the Company's financial statements for such periods.

 

During the two most recent fiscal years ended February 1, 2020 and February 2, 2019, and subsequent interim period through June 11, 2020, there were no "reportable events" as that term is described in Item 304(a)(1)(v) of Regulation S-K.

 

The audit reports of KPMG on the Company’s consolidated financial statements as of and for the fiscal years ended February 1, 2020 and February 2, 2019, respectively, did not contain an adverse opinion or a disclaimer of opinion, nor were they 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 fiscal years ended February 1, 2020 and February 2, 2019, contained an explanatory paragraph stating that “the Company continues to experience recurring losses and negative cash flows from operations, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.”  KPMG’s report also contains an explanatory paragraph stating that “the Company has changed its method of accounting for leases as of February 3, 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases.”

 

The Company has provided KPMG with a copy of this Form 8-K prior to its filing with the U.S. Securities and Exchange Commission (the “SEC”) and requested that KPMG furnish a letter addressed to the SEC stating whether it agrees with the statements made by the Company herein and, if not, stating the respects in which it does not agree. A copy of KPMG's letter dated June 16, 2020, is filed as Exhibit 16.1 to this Form 8-K.

 

 

Also on June 11, 2020, the Audit Committee unanimously approved the appointment of FRUCI & ASSOCIATES II, PLLC ("Fruci") as the Company's new independent registered public accounting firm to audit the Company's consolidated financial as of and for the year ending January 30, 2021. The decision to change the Company's independent registered public accounting firm was the result of a request for proposal process. The change will be effective upon Fruci's completion of its standard client acceptance process and execution of an engagement letter.

 

Forward-Looking Statements

This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this communication are forward-looking statements. The statements contained herein that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, and similar terms and phrases, including references to assumptions, in this document to identify forward-looking statements. These forward-looking statements are made based on management’s expectations and beliefs concerning future events and are subject to uncertainties and factors that could cause actual results to differ materially from the results expressed in the statements. The following factors are among those that may cause actual results to differ materially from the Company’s forward-looking statements:  risk of disruption of current plans and operations of etailz and the potential difficulties in customer, supplier and employee retention; the outcome of any legal proceedings that may be instituted against the Company; the Company’s level of debt and related restrictions and limitations, unexpected costs, charges, expenses, or liabilities; the Company’s ability to operate as a going-concern; deteriorating economic conditions and macroeconomic factors; the impact of the COVID-19 pandemic; and other risks described in the Company’s filings with the SEC, such as its Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.

The reader should keep in mind that any forward-looking statement made by us in this document, or elsewhere, pertains only as of the date on which we make it. New risks and uncertainties come up from time-to-time and it’s impossible for us to predict these events or how they may affect us. In light of these risks and uncertainties, you should keep in mind that any forward-looking statements made in this document or elsewhere might not occur.

 

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.

 

Dated:  June 16, 2020	TRANS WORLD ENTERTAINMENT CORPORATION
	By:	/s/ Edwin Sapienza
		Name: Edwin Sapienza
		Title: Chief Financial Officer

EXHIBIT INDEX

 

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