Cardiac Science, a developer of automated external defibrillator (AED) and diagnostic cardiac monitoring devices, has addressed outstanding issues with the FDA relating to the corrective AED field action announced on Nov. 13, 2009.
Under the updated recall plan, Cardiac Science will replace approximately 24,000 AEDs used by first responders and certain medical facilities in the U.S., including hospitals, medical clinics, dialysis centers and assisted-living facilities.
The company estimated this plan will add between $10 million and $15 million to the $18.5 million expense previously accrued for the November 2009 recall. The company expects to take a charge to earnings in the second quarter within this range. Cash expenditures related to this updated recall plan are expected to occur over the next year or more.
With this announcement, the company has executed an updated agreement with Silicon Valley Bank, increasing its line of credit from $5 million to $15 million and will use borrowings from this line, in combination with existing cash resources, to carry out this updated recall plan.
"We have worked constructively with the FDA to address its concerns and are pleased to bring this matter to a close. We are now focused on executing the updated recall," said Dave Marver, president and CEO at Cardiac Science.