SPOK

Business Context and Reporting Period

This Form 8-K is filed by USA Mobility, Inc. (not Spok Holdings, Inc.) on June 16, 2006. The report addresses a change in the registrant's certifying accountant and discloses significant material weaknesses in internal controls over financial reporting.

Key Financial Metrics

The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on audit firm changes and internal control deficiencies.

Material Changes and Events

• Change in Auditor: PricewaterhouseCoopers LLP (PwC) was appointed for Q1 2006 but declined to stand for election for the remainder of 2006 due to resource constraints. As of June 22, 2006, no new auditor had been engaged, though the selection process had commenced.
• Audit Opinions: PwC's reports for 2004 and 2005 did not contain adverse opinions, disclaimers, or qualifications regarding uncertainty, scope, or accounting principles.
• Disagreements: No disagreements with PwC were reported regarding accounting principles, practices, or audit scope.

Material Weaknesses and Risks

The company disclosed four material weaknesses in internal controls that led to restatements of financial statements for 2002–2005 and interim periods:

1. Income Taxes: Ineffective controls over the accuracy and valuation of income tax provisions and deferred tax balances, leading to restatements of tax expense, deferred tax assets, additional paid-in capital, and goodwill.
2. Transactional Taxes: Lack of controls over the completeness and accuracy of state and local transactional taxes (including sales and use taxes), resulting in restatements of general and administrative expenses and accrued tax liabilities.
3. Depreciation: Ineffective controls over depreciation expense and accumulated depreciation for paging infrastructure assets, specifically regarding useful lives and account reconciliations.
4. Asset Retirement Obligations: Ineffective controls over the valuation of asset retirement costs and obligations, including the fair value of deconstruction costs and usage estimates.

Management plans to develop remediation actions for these weaknesses. The company intends to authorize PwC to respond to inquiries from the successor auditor regarding these restatements.

Investor Verification Checklist

• Verify the identity of the new independent registered public accounting firm once selected.
• Review the specific restatement details for fiscal years 2002 through 2005 to understand the magnitude of prior financial adjustments.
• Monitor the progress of remediation plans for the four identified material weaknesses in internal controls.
• Confirm the status of the letter from PwC regarding their agreement with the company's statements on restatements and weaknesses.