A Diagnostics & Imaging Week
SeraCare Life Sciences (Oceanside, California) reported that it has terminated the employment of four of its executives and made other moves that reflect what it said are the discovery of "material weaknesses" in its internal controls.
In a statement, the company reported that its board has terminated the employment/consulting agreements of Barry Plost, board chairman; Michael Crowley Jr., president and CEO; Jerry Burdick, secretary; and Craig Hooson, CFO. Plost, Crowley and Burdick have also been asked to resign from the company's board.
In announcing these actions, SeraCare also reported that its board concluded, based on the recommendations of its audit committee, that its previously issued financial statements for the quarters ended Dec. 31, 2004; March 31, 2005; and June 30, 2005, cannot be relied upon and that it expects to restate one or more of the financial statements for these three quarters. The company said because of the problems in its internal controls it has retracted its FY05 guidance.
Thomas Lawlor, the current company COO, has assumed the additional responsibilities of president and CEO of the company on an interim basis while the board conducts "an internal and external search" for a CEO as well as a CFO. It said that an executive committee of the board, chaired by Robert Cresci, has been appointed to oversee company management in the interim period.
As previously reported, the company's failure to timely file its periodic reports is a covenant violation under its senior credit facility. It said that because the audit committee review is still ongoing, it does not expect that it will be able to file financials for the fiscal quarter ending March 31 on a timely basis and that it is "engaged in discussions" with the lenders under its senior credit facility and expects to seek a waiver of these violations. It added that there is no assurance of obtaining such a waiver.
SeraCare Life Sciences provides offerings include plasma-based therapeutic products, diagnostic products and reagents, cell culture products, specialty plasmas, in vitro stabilizers and the SeraCare BioBank, a proprietary database of medical information and associated blood, plasma, DNA and RNA samples.
In February, Nasdaq told SeraCare that because it had not made its financial filings for its most recent quarter, this would be considered "an additional deficiency" by its listing qualifications panel. As the result of an earlier hearing, Nasdaq told the company that it was delaying delisting of its securities pending a final decision.