AdvanSource Biomaterials Announces Favorable Settlement in Connection with MEDOS Medizintechnik AG Dispute

WILMINGTON, Mass.--(BUSINESS WIRE)--AdvanSource Biomaterials Corporation (NYSE Amex: ASB), a leading developer of advanced polymer materials for a broad range of medical devices, today announced the settlement of a dispute with MEDOS Medizintechnik AG (“MEDOS”), a German corporation. On July 6, 2007, MEDOS acquired Gish Biomedical, Inc., the Company’s former wholly-owned subsidiary, for a purchase price of approximately $7.5 million. The Company realized approximately $6.1 million in proceeds from the transaction and, pursuant to the terms of the purchase agreement, $1.0 million was placed in escrow for one year from the sale date as a reserve for any indemnity claims. On June 30, 2008, MEDOS notified the Company of the assertion of certain claims aggregating $4.3 million, which the Company disputed. On July 25, 2008, the Company initiated arbitration procedures which sought a declaration that the amounts claimed by MEDOS were without merit and unsupportable.

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