CHAD Therapeutics Delays Filing Form 10-Q Pending Completion of Potential Strategic Transaction
CHAD Therapeutics, Inc. (AMEX:CTU) announced today that it will be unable to file on a timely basis its Quarterly Report on Form 10-Q for the period ended September 30, 2007 (the “Quarterly Report”) because the Company is currently engaged in discussions regarding a potential strategic transaction which could significantly impact the Company’s reported results of operations and financial condition. As of today, the Company has not entered into any binding agreement. In light of the uncertainty regarding whether or not a transaction will be agreed as well as the terms of any transaction which is agreed, the Company will require additional time to determine the effect, if any, on the Company’s financial statements and the related disclosures to be included in the Quarterly Report. Until such determination is made, the financial statements and other disclosures required to be included in the Quarterly Report pursuant to the Securities Exchange Act of 1934, as amended, cannot be completed. Accordingly, the Company is not in a position to file its Quarterly Report on a timely basis.
The potential strategic transaction would, if successfully concluded, result in a significant restructuring of the Company. However, no agreement has been reached. Depending upon whether or not an agreement is reached and the terms of any such an agreement, the Company may be required to incur significant write-downs on the value of certain assets. The extent of such write-downs and their impact upon the Company’s financial statements cannot be determined at this time given the uncertainties regarding the potential strategic transaction.
About CHAD Therapeutics
CHAD Therapeutics, Inc. develops, produces and markets respiratory care devices designed to improve the efficiency of oxygen delivery systems for home health care and hospital treatment of patients suffering from pulmonary diseases. For more information, visit www.chadtherapeutics.com.
Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995.
The foregoing statements regarding prospects for future earnings and revenues, future sales trends and the introduction of products under development are forward-looking statements that involve certain risks and uncertainties. A number of important factors could cause actual results to differ materially from those contemplated by such forward-looking statements. These include the failure to complete the sale of CHADs oxygen business, the potential introduction of new products with perceived competitive advantages over the Company’s products, the terms of any distribution agreement which may be negotiated with respect to CHAD’s sleep products, and CHAD’s ability to anticipate and respond to technological and economic changes in the sleep disorder market. Additionally, CHAD’s products for the sleep disorder market have not yet been commercially introduced. The ability of the Company to successfully introduce these products will depend upon obtaining necessary regulatory approvals and demonstrating the efficacy and reliability of the products to the health care community. As with any new products, the Company cannot know if the products will perform as expected after they have been commercially introduced. The sleep disorder market is a new market for the Company, and the Company will be competing with several well-established and much larger competitors in this market. These competitors may offer more attractive prices for their products and may introduce new products that have technological capabilities equal or superior to the Company’s products. As a result, the Company cannot predict the level of success, if any, that it will achieve with its products for the sleep disorder market. The projected timing for the introduction of new products may be delayed as a result of unforeseen difficulties encountered in the design, manufacture and quality testing for such products. The Company has limited design and manufacturing resources and it relies to a significant extent upon independent contractors for the development of products for the sleep disorder market. As a result, the Company may have more difficulty ensuring adherence to projected timetables for the introduction of such products. Additional factors that could cause actual results to differ materially from those contemplated in this press release can be found in the Company’s annual and quarterly reports filed with the Securities and Exchange Commission under the caption “Risk Factors.”