United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 18, 2005
Langer, Inc.
(Exact name of registrant as specified in its charter)
Delaware | | 0-12991 | | 11-2239561 |
(State or other jurisdiction | | (Commission File Number) | | (IRS Employer |
of incorporation) | | | | Identification Number) |
| | | | |
450 Commack Road, Deer Park, New York | | 11729-4510 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: 631-667-1200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 | Results of Operations and Financial Condition. |
On November 21, 2005, Langer, Inc. (“Langer”) announced financial results for the fiscal quarter ended September 30, 2005. A copy of the press release announcing Langer’s earnings results for the fiscal quarter ended September 30, 2005, is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 4.02 | Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review. |
On November 18, 2005, Langer concluded that its previously filed condensed consolidated financial statements contained in its Form 10-Q for the three months ended March 31, 2005, and the three and six months ended June 30, 2005, should no longer be relied upon and needed to be restated. The restatement is required as a result of Langer’s accounting for the grant to Kanders & Company, Inc. (“Kanders & Co.”), the sole stockholder of which is Warren B. Kanders, the Chairman of the Board of Directors, of options to purchase 240,000 shares of Langer’s common stock (the “Options”) on November 12, 2004, and 100,000 restricted shares of Langer's common stock (the “Restricted Stock”), and also as a result of certain overstated liabilities.
Previously, Langer associated the Options grant with the duties performed by Mr. Kanders as Chairman of the Board and accounted for the service period relating to the Restricted Stock award as having commenced on September 1, 2005. Langer has now determined that (i) 225,000 of the 240,000 Options granted should be accounted for as granted for services rendered as a consultant to Langer, and (ii) the performance condition related to the Restricted Stock grant was satisfied upon consummation of Langer's public offering. To record this correction, Langer has restated the aforementioned periods to record stock option and stock award compensation of $211,869 and $238,869 in the three months ended March 31, 2005, and June 30, 2005, respectively, in accordance with Emerging Issues Task Force Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services,” as non-cash stock option and stock award compensation expense. Additionally, Langer determined that certain liabilities for professional fees and other general and administrative expenses had been overstated during the periods described above, and they have also been corrected in this filing.
The condensed consolidated financial statements as of and for the three months ended March 31, 2005, and the three and six months ended June 30, 2005 will be restated on Forms 10-Q/A, which are expected to be filed as soon as practicable.
The additional expense resulting from the non-cash stock option and stock award compensation for the three months ended March 31, 2005 is $211,869, and for the three and six months ended June 30, 2005 is $238,869 and $450,738, respectively. As a result of the reversal of certain accruals, professional fees and other general and administrative expenses will be reduced by $246, 926 for the three months ended March 31, 2005, increased by $35,473 for the three months ended June 30, 2005, and decreased by $211,453 for the six months ended June 30, 2005. Earnings per share, on a fully diluted basis, was unchanged at $.22, for the three months ended March 31, 2005,
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decreased from ($.19) to ($.24) for the three months ended June 30, 2005, and decreased from $.08 to $.03 for the six months ended June 30, 2005.
Langer’s management and Audit Committee reached their conclusions in consultation with Langer’s independent registered public accounting firm, Deloitte & Touche LLP. Langer will file, as soon as practicable, amended Quarterly Reports on Form 10-Q/A for the three months ended March 31, 2005 and the three and six months ended June 30, 2005.
A summary of the significant effects of the restatement on our Form 10-Q filings for the periods ended June 30, 2005 and March 31, 2005 are as follows:
The components (increase/(decrease) to expense of the restatement are as follows:
| | Three months ended | | Six months
ended | |
| | March 31, 2005 | | June 30, 2005 | | June 30, 2005 | |
Stock option and stock award compensation | | $ | 211,869 | | $ | 238,869 | | $ | 450,738 | |
Professional fees | | (135,000 | ) | 35,473 | | (99,527 | ) |
Other general and administrative expenses | | (111,926 | ) | — | | (111,926 | ) |
Period effect on expense | | $ | (35,057 | ) | $ | 274,342 | | $ | 239,285 | |
A summary of the significant effects of the restatement on our Form 10-Q filings for the periods ended June 30, 2005 and March 31, 2005 are as follows:
Consolidated Balance Sheet Effects:
| | March 31, 2005 | |
| | As previously
reported | | As restated | |
Other current liabilities | | $ | 4,331,352 | | $ | 4,084,426 | |
Total current liabilities | | 17,023,617 | | 16,776,691 | |
Total liabilities | | 41,154,868 | | 40,907,942 | |
Additional paid-in-capital | | 14,441,541 | | 14,653,410 | |
Total stockholders’ equity | | 6,655,047 | | 6,901,973 | |
Total liabilities and stockholders’ equity | | 47,809,915 | | 47,809,915 | |
| | | | | | | |
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Consolidated Statement of Operations Effects:
| | Three months ended
March 31, 2005 | |
| | As previously
reported | | As restated | |
General and administrative expenses | | $ | 2,300,098 | | $ | 2,265,041 | |
Operating income | | 526,189 | | 561,246 | |
Income before income taxes | | 1,449,292 | | 1,484,349 | |
Net income | | 1,410,292 | | 1,445,349 | |
Net income per common share: | | | | | |
Basic | | .32 | | .33 | |
Diluted | | .22 | | .22 | |
| | | | | | | |
Consolidated Balance Sheet Effects:
| | June 30, 2005 | |
| | As previously
reported | | As restated | |
Other current liabilities | | $ | 4,473,340 | | $ | 4,261,887 | |
Total current liabilities | | 18,215,968 | | 18,004,515 | |
Total liabilities | | 37,387,739 | | 37,176,286 | |
Common stock | | 190,601 | | 192,601 | |
Unearned stock compensation | | (185,417 | ) | (699,416 | ) |
Additional paid-in-capital | | 42,467,210 | | 43,429,949 | |
Total stockholders’ equity | | 33,809,639 | | 34,021,092 | |
Total liabilities and stockholders’ equity | | 71,197,378 | | 71,197,378 | |
| | | | | | | |
Consolidated Statement of Operations Effects:
| | Three months ended
June 30, 2005 | |
| | As previously
reported | | As restated | |
General and administrative expenses | | $ | 2,307,329 | | $ | 2,581,671 | |
Operating income (loss) | | 133,554 | | (140,788 | ) |
(Loss) before income taxes | | (935,535 | ) | (1,209,877 | ) |
Net (loss) | | (983,535 | ) | (1,257,877 | ) |
Net (loss) per common share: | | | | | |
Basic | | (.19 | ) | (.24 | ) |
Diluted | | (.19 | ) | (.24 | ) |
| | | | | | | |
Consolidated Statement of Operations Effects:
| | Six months ended
June 30, 2005 | |
| | As previously
reported | | As restated | |
General and administrative expenses | | $ | 4,607,427 | | $ | 4,846,712 | |
Operating income | | 659,741 | | 420,456 | |
Income before income taxes | | 513,757 | | 274,472 | |
Net income | | 426,757 | | 187,472 | |
Net income per common share: | | | | | |
Basic | | .09 | | .04 | |
Diluted | | .08 | | .03 | |
| | | | | | | |
Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit | | Description |
| | |
99.1 | | Press Release dated November 21, 2005, with respect to Langer’s financial results for the quarter ended September 30, 2005 (furnished only). |
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: November 21, 2005 | Langer, Inc. |
| |
| By: | /s/ Joseph P. Ciavarella | |
| | Joseph P. Ciavarella, Vice President
and Chief Financial Officer |
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Exhibit Index
Number | | Exhibit |
99.1 | | Press Release dated November 21, 2005, with respect to the Registrant’s financial results for the quarter ended September 30, 2005 (furnished only). |
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