GAITHERSBURG, Md., Aug. 13 /PRNewswire-FirstCall/ -- BioVeris Corporation announced today that it has settled its two lawsuits against Meso Scale Diagnostics, LLC. ("MSD"), Meso Scale Technologies, LLC. ("MST") and Jacob Wohlstadter. The Company said it entered an agreement that also settles all other outstanding disputes between the parties and provides that MSD or MST will purchase the Company's interests in MSD. MSD is a company jointly owned by the Company and MST, which is wholly-owned by Jacob Wohlstadter, the son of Samuel J. Wohlstadter, the Company's Chief Executive Officer.
In addition to the dismissal with prejudice by the Company of the two lawsuits, the parties have resolved certain payment disputes and entered a mutual general release of claims. In accordance with the agreement, the Company's representative on the Board of Managers of MSD resigned and the parties agreed that the Board of Managers will now consist of one representative designated by MST. As part of the agreement, the Company has paid MSD approximately $3 million. This payment consists of $5 million to settle all other disputes between the parties concerning the funding of certain costs of MSD, of which there is a $2 million credit that will be applied against future MSD payment obligations to the Company for the purchase of its interests in MSD.
A committee of the Company's Board of Directors representing its independent members negotiated and unanimously approved the agreement. The Committee said, "This agreement settles not just the existing litigation but all outstanding disputes with MSD. Entering into the agreement also allows us to file our annual report, proceed with the sale of our interest in MSD and avoid the costs and distractions of protracted litigation. For these reasons, all the independent directors believe it was in the best interests of the Company to enter into the agreement."
Pursuant to the agreement, MSD agreed to provide the Company promptly with its audited financial statements for the year ended December 31, 2003. The Company said that as a result, it expected within the next few days to file its Annual Report on Form 10-K. Because the Company is required to consolidate the financial information of MSD pursuant to FASB Interpretation No. 46, which it adopted as of March 31, 2004, the Company requires the audited financial statements of MSD to complete its Form 10-K. The Company was not able to file its Form 10-K on a timely basis because the MSD financial statements were not available and it was unable to conclude on the appropriate accounting for MSD. MSD also agreed to provide its financial statements to the Company in the future on a timely basis for as long as the Company is required to consolidate the financial results of MSD.
MSD and MST also agreed to purchase the Company's interest in MSD substantially in accordance with the terms of the parties' original agreement, which provided for a fair market value price less an agreed upon discount. In the settlement agreement, the parties set forth certain procedures for that purchase, including matters pertaining to the appraisal process pursuant to which the fair market value price will be determined by independent appraisers. The Company expects the initial appraisal process to be completed at the end of August 2004 or, if the initial appraisers do not agree and a third appraiser is needed, by mid October 2004. The purchase will be deemed effective at the time the purchase price is determined, and the purchase price will be paid over time from a percentage of MSD sales or certain financings, in accordance with the original agreement.
The parties also released all claims against one another and the Company agreed to indemnify MSD, MST and Jacob Wohlstadter for certain matters relating to their disputes.
BioVeris Corporation is an international health care company dedicated to the commercialization, directly and through collaborations and alliances, of innovative, technology-based products and services intended to improve the quality of life. The company applies its expertise in biotechnology, detection systems, and clinical diagnostics to the development of new and proprietary products and pursues collaborative arrangements to identify new health care product opportunities, accelerate product development, and enhance its global capabilities and competitiveness. BioVeris is headquartered in Gaithersburg, Maryland. More information about the company can be found at http://www.bioveris.com/.
This press release contains forward-looking statements within the meaning of the federal securities laws that relate to future events or BioVeris' future performance. All statements in this press release that are not historical facts, including any statements about the settlement agreement, the appraisal process and its timing, and the public dissemination of future financial results or Form 10-K are hereby identified as "forward-looking statements." The words "may," "should," "will," "expect," "could," "anticipate," "believe," "estimate," "plan," "intend" and similar expressions have been used to identify certain of the forward-looking statements. In this press release, BioVeris has based these forward-looking statements on management's current expectations, estimates and projections and they are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those described in the forward- looking statements. Such forward-looking statements should, therefore, be considered in light of various important factors, including changes in general economic, business and industry conditions. The foregoing sets forth some, but not all, of the factors that could impact upon BioVeris' ability to achieve results described in any forward-looking statements. A more complete description of the risks applicable to BioVeris is provided in the Company's filings with the Securities and Exchange Commission (SEC) available at the SEC's web site at http://www.sec.gov/. Investors are cautioned not to place undue reliance on these forward-looking statements. Investors also should understand that is not possible to predict or identify all risk factors and that neither this list nor the factors identified in BioVeris' SEC filings should be considered a complete statement of all potential risks and uncertainties. BioVeris has no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release.