SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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) 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
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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 May 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 as of and for the year ended March
31, 1997, and for periods subsequent thereto. 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.
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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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: March 18, 1998
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