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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) MARCH 11, 1998
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CARING PRODUCTS INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in Charter)
DELAWARE 333-35239 98-0134875
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(State or Other (Commission (IRS Employer
Jurisdiction of File No.) Identification No.)
Incorporation)
200 FIRST AVENUE WEST, SUITE 200, SEATTLE, WASHINGTON 98119
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (206) 282-6040
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
KPMG (chartered accountants) and KPMG Peat Marwick LP, collectively KPMG,
were previously the principal accountants for Caring Products International,
Inc. On March 11, 1998, KPMG's appointment as principal accountants was
terminated and on March 12, 1998, Peterson Sullivan P.L.L.C. was engaged as
principal accountants. The decision to change accountants was recommended by
the audit committee of the board of directors and was approved by the board of
directors.
In connection with the audits of the two fiscal years ended March 31, 1997,
and the subsequent interim period through March 11, 1998, there were no
disagreements with KPMG on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedures, which
disagreements if not resolved to their satisfaction would have caused them to
make reference in connection with their opinion to the subject matter of the
disagreement.
Under dates of August 29, 1997 and December 23, 1997, KPMG reported to the
board of directors and the audit committee of the board of directors,
respectively, a reportable condition that KPMG considered to be a material
weakness under standards established by the American Institute of Certified
Public Accountants. Reportable conditions are matters coming to KPMG's
attention that, in their judgment, relate to significant deficiencies in the
design or operations of internal control and could adversely affect the
Registrant's ability to record, process, summarize and report financial data
consistent with the assertions of management in the consolidated financial
statements. A material weakness is a reportable condition in which the design
or operation of internal control does not reduce to a relatively low level the
risk that errors or irregularities in amounts that would be material to the
consolidated financial statements may occur and not be detected and corrected
within a timely period by employees in the normal course of performing their
assigned duties.
KPMG indicated the Company had material weaknesses. The identified
material weaknesses related to deficiencies in the Company's accounting and
reporting function. The principal deficiencies included: ineffective monthly
account analyses and reconciliations; inaccurate inventory records; unrecorded
monthly journal entries for recurring accruals; and improper accounting for
foreign currency transactions.
In addition, KPMG reported that some personnel were not effectively supervised
to ensure satisfactory performance of their duties and did not possess the
requisite accounting knowledge to comply with generally accepted accounting
principles.
In August 1997, subsequent to the aforementioned material weakness being
identified, Registrant consulted with and engaged Peterson Sullivan P.L.L.C. to
assist Registrant with its accounting during the period April 1, 1997 through
September 30, 1997. Accounting assistance included, but was not limited to,
account analysis, review and follow-up of unusual items, and preparation of
journal entries and general ledger trial balances. In September 1997, the
Registrant hired a new chief financial officer. These actions were taken by the
Registrant to mitigate its material weakness related to the accounting and
reporting function.
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The audit reports of KPMG on the consolidated financial statements of
Caring Products International, Inc. and subsidiaries as of and for the years
ended March 31, 1997 and 1996, did not contain any adverse opinion or disclaimer
of opinion, nor were they qualified or modified as to uncertainty, audit scope,
or accounting principles.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
16 -- Letter, dated March 30, 1998, from KPMG Peat Marwick LLP, the
Registrant's former principal accountants, to the Securities and Exchange
Commission pursuant to Item 304 (a)(3) of Regulation S-K.
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.
CARING PRODUCTS INTERNATIONAL, INC.
By: /s/ Sandra L. Sternoff
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Sandra L. Sternoff,
Chief Financial Officer
Dated: April 1, 1998
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[LETTERHEAD]
March 30, 1998
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
We were previously principal accountants for Caring Products International,
Inc. and, under the date of June 13, 1997, we reported on the consolidated
financial statements of Caring Products International, Inc. and subsidiaries
as of and for the year ended March 31, 1997. On March 13, 1998, we were
notified that our appointment as principal accountants was terminated. We
have read Caring Products International, Inc.'s statements included under
Item 4 of its Form 8-K dated March 18, 1998, and we agree with such
statements, except that we are not in a position to agree or disagree with
Caring Products International, Inc.'s statement that (1) on March 12, 1998,
Peterson Sullivan P.L.L.C. was engaged as principal accountants, (2) the
decision to change accountants was recommended by the audit committee of the
board of directors and was approved by the board of directors, (3) in May
1997, Peterson Sullivan P.L.L.C. was engaged to assist Registrant with its
accounting as of and for the year ended March 31, 1997, and for periods
subsequent thereto, and accounting assistance included, but was not limited
to, account analysis, review and follow-up of unusual items, and preparation
of journal entries and general ledger trial balances, and (4) in September
1997, the Registrant hired a new chief financial officer.
Very truly yours,
/s/ KPMG Peat Marwick LLP
