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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): August 8, 2006
Oracle Healthcare Acquisition Corp.
(Exact name of registrant as specified in its charter)
Delaware 000-51785 26-0126028
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification
No.)
200 Greenwich Ave., 3rd Floor
Greenwich, Connecticut 06830
(Address of principal executive offices)
(203) 862-7900
(Registrant's telephone number, including area code)
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 (see General Instruction A.2 below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
Exchange Act (17 CFR 240.13e-4(c))
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Item 4.02 - Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.
In connection with the preparation of the June 30, 2006 10-Q, Oracle
Healthcare Acquisition Corp. (the "Company"), in consultation with its
independent registered accounting firm, Rothstein, Kass & Company, PC
("Rothstein Kass"), determined that the Company must reclassify certain amounts
in its financial statements to account for the warrants issued as part of the
units in the Company's initial public offering as a liability. This issue arose
as a result of recent comments the Securities and Exchange Commission has made
in connection with similar blank check companies, each of such companies having
a warrant structure similar to the Company's. The Company, after consultation
with Rothstein Kass, based its conclusions upon recent interpretations of the
accounting for warrants issued as part of units under Emerging Issues Task Force
("EITF") No. 00-19, "Accounting for Derivative Financial Instruments Indexed to,
and Potentially Settled in, a Company's Own Stock" ("EITF No. 00-19").
Under EITF 00-19, the fair value of the warrants issued as part of the
units sold in the Company's initial public offering should be reported as a
liability. The warrant agreement provides for the Company to register the shares
underlying the warrants and is silent as to if a penalty is to be incurred in
the absence of the Company's ability to deliver registered shares to the warrant
holders upon warrant exercise. Under EITF No. 00-19, registration of the common
stock underlying the warrants is not within the Company's control. As a result,
the Company must assume that it could be required to settle the warrants on a
net-cash basis, thereby necessitating the treatment of the potential settlement
obligation as a liability. Further, EITF No. 00-19 requires that the Company
record the potential settlement obligation at each reporting date using the
current estimated fair value of the warrants, with any changes being recorded
through its statement of operations. The potential settlement obligation will
continue to be reported as a liability until such time as the warrants are
exercised, expire, or the Company is otherwise able to modify the registration
requirements in the warrant agreement to remove the provisions which require
this treatment. The fair value of the warrant liability was determined using the
trading value of the warrants. The value assigned to the warrant liability at
March 8, 2006 (the date of issuance) and March 31, 2006 were $19,791,688 and
$24,541,668, respectively. The fair value of the warrants was determined by the
trading value of the securities closest to the balance sheet date of each
period. Amounts reported as warrant liability expense in the Company's
statements of operations resulting from the change in valuation of the warrant
liability was $0 and $4,750,000 for the period ended March 8, 2006 and the three
months ended March 31, 2006, respectively. The Company had previously issued
financial statements which did not present the warrant liability. Accordingly,
the financial statements contained within the Company's Form 8-K dated March 10,
2006 for the period of September 1, 2005 (date of inception) to March 8, 2006,
and Form 10-Q for the three months ended March 31, 2006 should no longer be
relied upon.
After discussions with management and members of the Board of Directors of
the Company, the Company has determined to restate its financial statements for
such periods. The restated financial statements will be included in the
Company's Form 10-Q/A for the period ended March 31, 2006, and Form 8-K/A for
the period ended March 8, 2006. The Company's filing for all periods after March
31, 2006 will reflect this accounting treatment.
Company management has discussed the matters disclosed in this Current
Report on Form 8-K with Rothstein Kass.
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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.
ORACLE HEALTHCARE ACQUISITION CORP.
By: /s/ Joel D. Liffmann
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Joel D. Liffmann
President and Chief Operating
Officer
Date: August 9, 2006
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