Obalon: Whistleblower ’ s allegations ‘ without merit ’

Obalon Therapeutics (NSDQ:OBLN) said today that a probe by its audit committee found that the whistleblower allegations that last month sundered a $35 million offering are “without merit.” In January the San Diego-based company terminated the offering after the whistleblower told its independent auditors, KPMG, of the allegations of improper revenue recognition during the fourth quarter. Obalon was looking to offer 5.5 million shares at $5.50 per share, for roughly $30.3 million plus an over-allotment worth another $4.5 million. Obalon said at the time that the allegations made it “infeasible for the company to complete an investigation of the allegations prior to the intended closing of the public offering.” Today the company said that it’s board’s four-member audit committee, led by law firm Latham & Watkins and with forensic accounting assistance from Ankura Consulting Group, found no evidence of wrongdoing. “We took the whistleblower complaint very seriously and conducted a thorough investigation. The investigators found no merit to any of the whistleblower allegations, determined that preliminary revenues were not misrepresented and that management did nothing to mislead investors,” audit committee chairman Les Howe said in prepared remarks. “Prior to our U.S. launch in January 2017, we worked closely with our audit committee to develop a robust procedure for appropriately recognizing revenue. We hired a dedicated rev...
Source: Mass Device - Category: Medical Devices Authors: Tags: MassDevice Earnings Roundup Wall Street Beat Weight loss Obalon Therapeutics Source Type: news