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): July 22, 2011 (July 19, 2011)
MISONIX, INC.
(Exact name of registrant as specified in its charter)
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| New York
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1-10986
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11-2148932 |
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.) |
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1938 New Highway,
Farmingdale, NY
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11735 |
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(Zip Code) |
Registrant’s telephone number, including area code: (631) 694-9555
(Former name or former address, if changed since last report.)
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in a Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 28, 2011, MISONIX, INC. (the “Company”) was a
party to a suit filed by PuriCore International Limited (“PuriCore Limited”) in the
High Court of Justice, Queens Bench Division, Commercial Court, Royal Courts of
Justice, London, England (Claim No. 2011-42) (the “Lawsuit”). In the Lawsuit,
PuriCore Limited claimed damages from the Company in respect of breach of warranties
contained in the Stock Purchase Agreement, dated August 4, 2009 (the “SPA”),
pursuant to which the Company sold its Labcaire Systems, Ltd. subsidiary to PuriCore
Limited. PuriCore Limited claimed damages of £2,167,000 or approximately
$3,600,000, plus interest and its legal costs. The Company denied the allegations
contained in the Lawsuit.
On July 19, 2011, PuriCore Limited and the Company reached an agreement to settle
the Lawsuit (the “Settlement”). The Settlement provides that the Company (i)
forgive in full PuriCore Limited and PuriCore plc’s obligation under the SPA to pay
up to $1,000,000 of not booked, contingent Commissions (as defined in the SPA); (ii) pay PuriCore, Inc.
(“PuriCore”), an affiliate of PuriCore Limited, $650,000 towards PuriCore Limited’s
legal costs and (iii) enter into a Product License and Distribution Agreement, dated
as of July 19, 2011, with PuriCore (the “Distribution Agreement”).
Pursuant to the Distribution Agreement, the Company has been granted the right to
distribute PuriCore’s Vashe solution products in the United
States, on a private label basis, as an irrigating
solution for the treatment of human wound care in conjunction with therapeutic
ultrasonic procedures (the “Field”). PuriCore has agreed, subject to modification,
not to sell the products that are the subject of the Distribution Agreement (the
“Licensed Products”) to any other therapeutic ultrasound company for distribution in
the Field in the United States (“Exclusivity”). The Company has agreed not to sell
or distribute in the United States in the Field any irrigating solution that has
anti-microbial properties other than the Licensed Products so long as the Company
has Exclusivity.
The Distribution Agreement is for a three (3) year term with automatic renewals for
successive two (2) year periods; provided that the Company and PuriCore have agreed
upon sales volume targets for each renewal period (such volume targets not to
increase by more than ten (10%) percent year over year unless otherwise agreed) and
provided that the cost terms shall be no less favorable than the twelve (12) months
leading up to the start of such renewal period. In no event will the Distribution
Agreement survive beyond the expiration or invalidation of all of PuriCore’s
patents.
During the initial term of the Distribution Agreement, the Company is obligated to
either purchase or pay a minimum of $2,000,000 in gross margin value to PuriCore for
the Licensed Products (the “Minimum Payment”). The Minimum Payment is subject to
downward adjustment and elimination in the event that (i) PuriCore chooses to
eliminate Exclusivity, (ii) the Company’s right to manufacture the Licensed Products
under certain conditions has been triggered but the Company is unable to manufacture
the Licensed Products or to have the Licensed Products manufactured for it by third
parties or (iii) the U.S. Food and Drug Administration has made a final
determination that prohibits the sale of the Licensed Products for use in the Field.
The Company has the right to manufacture the Licensed Products if PuriCore is unable
to meet certain performance standards and will pay PuriCore a royalty after the
$2,000,000 in gross margin value requirement has been satisfied if the Company is
then manufacturing the Licensed Products.
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During a renewal period, PuriCore may terminate the Distribution Agreement if (i)
the Company fails to purchase the agreed upon volume target for such renewal period
and does not cure such failure in accordance with the Distribution Agreement or (ii)
upon twelve (12) months notice.
Attached as Exhibit 99.1 is a press release issued by the Company on July 20, 2011
announcing the Settlement and the Distribution Agreement.
The foregoing description of the Distribution Agreement is qualified in its entirety
by reference to the provisions of the Product License and Distribution Agreement
attached to this report as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit 10.1
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Product License and Distribution Agreement, dated as of July
19, 2011, by and between PuriCore, Inc. and MISONIX, INC. |
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| Exhibit 99.1
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Press Release of MISONIX, INC., dated July 20, 2011. |
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