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July 20, 2011 /PRNewswire/ -- Misonix, Inc. (NASDAQ: MSON), a medical device company that designs, manufactures and markets innovative therapeutic ultrasonic products worldwide for wound debridement, cosmetic surgery, neurosurgery, laparoscopic surgery, and other surgical and medical applications, has announced today that it has settled the lawsuit brought against it by PuriCore International Limited and PuriCore plc. (together "PuriCore") in connection with the sale to PuriCore of Misonix's Labcaire business in August of 2009. The settlement involves the forgiveness by Misonix of up to
$1,000,000 of not booked, contingent commission payments on future sales of Labcaire products. PuriCore will continue to pay the
$750,000 remaining on the Loan Notes issued as part of the original Stock Purchase Agreement. Misonix also agreed to pay
$650,000 towards PuriCore's legal costs. As an important part of the settlement, Misonix and PuriCore, Inc., a U.S. subsidiary of PuriCore, entered into a Product License and Distribution Agreement (the "Distribution Agreement") whereby Misonix will distribute, on a limited exclusive basis with respect to other therapeutic ultrasound companies in
the United States, a private label version of PuriCore's Vashe® wound therapy product, which is a solution intended for cleansing, irrigating, moistening, and debriding acute and chronic dermal lesions. Use of the new product will be emphasized in conjunction with clinical procedures performed with Misonix ultrasonic systems and gives surgeons and clinicians an expanding line of products for treating wounds. The Distribution Agreement is for three years with a two year extension contingent on meeting certain goals. As part of this Distribution Agreement, Misonix has the obligation over a three year period to either purchase or pay a minimum of
$2 million in gross margin value to PuriCore. When PuriCore receives
$2 million in gross margin purchases under the Distribution Agreement, it is anticipated that Misonix will have received more than
$4 million in gross margin.
Michael A. McManus, President and Chief Executive Officer of Misonix, stated, "We are very pleased to have resolved the dispute with PuriCore. Managing a lawsuit in the U.K. and legal expenses associated with the case were consuming valuable senior management time and resource. We believe the resolution of this lawsuit is in the best interest of shareholder value and the continued growth of Misonix.
"Prior to the lawsuit, we had been working with PuriCore's wound care group in pursuit of a similar distribution arrangement for the Vashe® product. In concert with the recent addition of Anika Therapeutics S.r.l.'s Hyalomatrix® skin substitute to our product portfolio, which is anchored by our SonicOne® Ultrasonic Wound Care System, the PuriCore product becomes a valuable extension of our wound treatment capability. We will be working with PuriCore on the development of a sterile version of the product that can be used with the BoneScalpel™ with SonicOne Technology in the operating room. We believe the PuriCore product addition will add incremental revenue and margin to our existing wound care product platform."