Ciphergen Announces Second Quarter 2005 Restatement Decision; Receipt of Delisting Notification from Nasdaq
November 16 2005 - 5:00PM
PR Newswire (US)
FREMONT, Calif., Nov. 16 /PRNewswire-FirstCall/ -- Ciphergen
Biosystems, Inc. (NASDAQ:CIPH) (the "Company") announced today that
the Company's Audit Committee (the "Committee") has determined that
previously reported results in the Company's Quarterly Report on
Form 10-Q for the quarter ended June 30, 2005 (the "Q2 Report")
should be restated to recognize revenue in a manner consistent with
the Company's revenue recognition policy. As a result, the
Committee has concluded that the Q2 Report should no longer be
relied upon. As previously announced on November 7, 2005, the Audit
Committee is, with the assistance of external accounting advisors,
conducting an investigation primarily regarding the recognition of
revenue in connection with certain sales transactions. To date, the
investigation has identified four transactions involving instances
of revenue recognition in a manner inconsistent with the Company's
revenue recognition policy. Based on the findings of its advisors
and the progress of the investigation to date, the Committee
believes that these transactions resulted in improperly recognized
revenue of approximately $503,000 for the quarter ended June 30,
2005, representing approximately 7% of reported revenue for the
quarter. The Company expects that the removal of this revenue would
cause the Company's reported net loss for the second quarter of
fiscal 2005 to increase by approximately $301,000, representing
approximately 3% of the Company's reported net loss for the
quarter. The Committee's investigation is not complete. The
Committee and its advisors are currently reviewing the
appropriateness of revenue recognition in connection with certain
transactions that took place in the fourth quarter of fiscal 2004
and in fiscal 2005. Due to the ongoing nature of the Committee's
investigation, the reported periods affected and the financial
impact of the transactions described above may change as further
information becomes available. In addition, the Company has not
completed its assessment of how the errors it has identified
reflect on the adequacy of its internal controls over financial
reporting. However, the Company expects that, either individually
or in the aggregate, these errors may result in the Company
reporting one or more material weaknesses in its internal controls
over financial reporting. The Company and the Committee are
continuing to assess these matters and their implications on the
adequacy of the Company's internal controls. Also, on November 15,
2005, the Nasdaq Listings Qualification Department notified the
Company that its common stock will be delisted from The Nasdaq
National Market effective at the opening of business on Friday,
November 25, 2005 unless the Company requests a hearing in
accordance with applicable Nasdaq rules. In its letter to the
Company, Nasdaq cited as the reason for delisting that the Company
has not complied with its periodic reporting requirements for the
filing of its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2005 (as required pursuant to Rule 4310(c)(14) of the
Nasdaq Marketplace Rules). Effective as of the opening of business
on November 17, 2005, the trading symbol for the Company's common
stock will be changed from CIPH to CIPHE. The Company intends to
appeal Nasdaq's determination by timely requesting a hearing before
a Nasdaq Listing Qualifications Panel (the "Panel"), thereby
staying the potential delisting of the Company's common stock
pending the issuance of a Panel decision. As part of the hearing
with the Panel, the Company plans to request an exception that
would allow the continued listing of the Company's common stock on
Nasdaq until the Company files its Quarterly Report on Form 10-Q
for the quarter ended September 30, 2005 with the Securities and
Exchange Commission. There can be no assurance that the Panel will
grant the Company's request for an exception that would allow the
continued listing of the Company's common stock on Nasdaq until the
Company is in compliance with Marketplace Rule 4310(c)(14). About
Ciphergen Ciphergen is dedicated to the discovery of protein
biomarkers and panels of biomarkers and their development into
protein molecular diagnostic tests that improve patient care; and
to providing collaborative R&D services through its Biomarker
Discovery Center(R) laboratories for biomarker discovery for new
diagnostic tests as well as pharmacoproteomic services for improved
drug toxicology, efficacy and theranostic assays. Ciphergen
develops, manufactures and markets a family of ProteinChip(R)
Systems and services for clinical, research and process proteomics
applications. ProteinChip Systems enable protein discovery,
validation, identification and assay development to provide
researchers with predictive, multi-marker assay capabilities and a
better understanding of biological function at the protein level.
Additional information about Ciphergen can be found at
http://www.ciphergen.com/. Safe Harbor Statement Note Regarding
Forward-Looking Statements: This press release contains
forward-looking statements. For purposes of the Private Securities
Litigation Reform Act of 1995 (the "Act") Ciphergen disclaims any
intent or obligation to update these forward-looking statements,
and claims the protection of the Safe Harbor for forward-looking
statements contained in the Act. Examples of such forward-looking
statements include those regarding the amounts of improperly
recognized revenue and the effect on reported net losses for the
second quarter of fiscal 2005 and other periods, potential material
weaknesses in internal controls over financial reporting, and the
intended request for an appeal hearing before a Nasdaq Listing
Qualifications Panel and potential delisting of Ciphergen Common
Stock from trading on Nasdaq. Actual results may differ materially
from those projected in such forward-looking statements due to the
fact that the investigation of the Audit Committee of the Ciphergen
Board of Directors is ongoing and has not been completed, and that
there can be no assurance that the Nasdaq Listing Qualifications
Panel will grant Ciphergen's request for continued listing of its
common stock. Investors should consult Ciphergen's filings with the
Securities and Exchange Commission for further information
regarding these and other risks of the Company's business.
Ciphergen, ProteinChip and Biomarker Discovery Center are
registered trademarks of Ciphergen Biosystems, Inc. DATASOURCE:
Ciphergen Biosystems, Inc. CONTACT: Sue Carruthers, Investor
Relations of Ciphergen Biosystems, Inc., +1-510-505-2233 Web site:
http://www.ciphergen.com/
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