SeraCare board says 10-Qs filed in 2004, 2005 unreliable, expects to be late with 10-Q for March 31

By Jennifer Chiou

New York, March 14 - SeraCare Life Sciences, Inc.'s said the financial statements in its previously issued 10-Qs for the quarters ended Dec. 31, 2004, March 31, 2005 and June 30, 2005 are no longer reliable.

The board said it came to this conclusion based on the recommendations of an audit committee during its internal review, which is still ongoing.

The company said it plans to restate one or more of the financial statements for the first three quarters of fiscal 2005.

Because the committee's review is not complete, SeraCare said it does not expect to file its 10-Q for its fiscal quarter ending March 31 on time. The company is in talks with lenders under its senior credit facility to seek a waiver of the covenant violations.

SeraCare said it believes that there are material weaknesses in its internal control over financial reporting and has retracted its previously issued guidance for fiscal 2005.

Also based on the committee's recommendations, the board terminated SeraCare's employment/consulting agreements with board chairman Barry D. Plost, president and chief executive officer Michael F. Crowley, Jr., secretary Jerry L. Burdick and chief financial officer Craig A. Hooson. In addition, Plost, Crowley and Burdick have also been asked to resign from the board.

Chief operating officer Thomas Lawlor has assumed the responsibilities of the president and chief executive officer. Also, Robert Cresci will be the chair of an executive committee of the board, appointed to oversee the management of the company during the interim period.

On Feb. 16, the company said it did not file its form 10-Q for the fiscal quarter ended Dec. 31 in a timely manner, a violation of Nasdaq Marketplace Rule 4310(c)(14).

The company had requested a hearing, held on Feb. 2, before the panel to review Nasdaq's original determination to delist the company's securities based on the company not filing in a timely manner its 10-K for its fiscal year ended Sept. 30.

Nasdaq previously advised SeraCare that the delisting of its securities has been stayed, pending a final, written decision by the panel.

Based in Oceanside, Calif., SeraCare is a manufacturer and provider of biological products and services to diagnostic, therapeutic, drug discovery and research organizations.

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