Merge to delay financials
Merge Technologies (Milwaukee; doing business as Merge Healthcare ) reported that it has not completed its financial statements for the year ended Dec. 31, 2005. Accordingly, it did not file its Form 10-K on March 16 and does not expect to file that form by March 31, so the company did not request a 15-day extension permitted by Rule 12b-25 under the Securities Act of 1934, as amended. The reason for the delay relates to revenue recognition and tax accounting matters relating to the merger of the company and Cedara Software (Mississauga, Ontario) in June 2005.
An additional reason for the delay has been the investigation of anonymous complaints received by the company. In accordance with its policies, the audit committee of the board is conducting a review of each of the communications. The audit committee has retained independent advisors to as-sist in those reviews.
The company said that on March 16, the management and the audit committee concluded that the company's previously issued financial statements for the quarters ended June 30, 2005, and Sept. 30, 2005, as contained in Merge's quarterly reports on Form 10-Q for the quarters ended those dates, should no longer be relied upon.
The company has determined that about $3.8 million of additional tax liability needs to be recorded as of June 30, 2005, relating to the company's merger with Cedara Software, with an approximate $2.5 million increase to goodwill and an approximate $1.3 million increase to income tax expense for the quarter ended June 30, 2005.
ArthroCare requests late filing for annual report
ArthroCare (Austin, Texas) said it has filed a notification of late filing in accordance with Rule 12b-25 of the Securities Exchange Act of 1934, as amended, with the SEC for its annual report on Form 10-K for the fiscal year ended Dec. 31, 2005, which provides for a 15-day extension for the filing of its annual report until March 31.
ArthroCare, a developer of minimally invasive surgical products, said it expects that the financial statements contained in its 2005 annual report will be consistent in all material respects with its previous publicly announced results. The company anticipates that it will be able to file its complete annual report on Form 10-K on or before March 31.
While performing an extensive analysis of its operations, ArthroCare concluded it did not maintain effective internal control over the preparation and review of intercompany account reconciliations among its subsidiaries and it has determined that this control deficiency constitutes a material weakness. The activities to remediate this weakness are under way and the company expects to remediate this material weakness by the end of 2006.
B&L to file annual report by April 30
Bausch & Lomb (B&L; Rochester, New York) filed a Form 12b-25 with the SEC indicating that it must delay filing its 10-K which was to be filed by last Thursday, and that it expects to file its 2005 annual report on or before April 30.
The reasons for the company's delay in filing its 10-K include the previously disclosed investigation by the audit committee of the company's board of directors into allegations of misconduct at the company's Brazil subsidiary is complete. As previously reported, the company expects to restate financial results for the fiscal years ended 2001 through 2004, as well as for the first and second quarters of 2005, in order to account properly for the impact of tax matters identified in connection with that investigation.
The previously reported independent investigation into alleged improper sales practices at the company's Korea vision care joint venture, BL Korea, is ongoing. To date, the Korea investigation has found evidence that from 2002 to 2005, BL Korea engaged in improper vision care-related sales practices in violation of company policies.
In light of that evidence, B&L has preliminarily determined that, pursuant to generally accepted accounting principles, all BL Korea vision care transactions for this period should be recorded under consignment accounting rules, which only recognize revenue upon payment by the customer.
Biopure regains Nasdaq compliance
Biopure (Cambridge, Massachusetts) reported that Nasdaq has notified it that it has regained compliance with the $1 minimum bid price requirement for continued listing.
Biopure manufactures oxygen therapeutics that are intravenously administered to deliver oxygen to the body's tissues. Hemopure [hemoglobin glutamer- 250 (bovine)], or HBOC-201, is approved for sale in South Africa for the treatment of surgical patients who are acutely anemic. Biopure said it plans to apply in Europe in mid 2006 for approval of an acute anemia indication in orthopedic surgery patients.