CHEMBIO DIAGNOSTICS, INC. (NASDAQ:CEMI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement.
To the extent required by this Item 1.01, the disclosure set
forth under the heading “Employment Agreements” in Item 2.01 of
this Current Report on Form 8-K is incorporated by reference
herein.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Stock Purchase Agreement
On January 9, 2017, Chembio Diagnostics, Inc., a Nevada
corporation (“Chembio”), completed the acquisition of RVR
Diagnostics Sdn Bhd, a Malaysia corporation (“RVR”), to the
previously reported Amended And Restated Stock Purchase
Agreement, dated as of December 7, 2016 (the “Stock Purchase
Agreement”), by and among Chembio, RVR, Avijit Roy and
Magentiren Vajuram (Messrs. Roy and Vajuram, the “Sellers”).
to the Stock Purchase Agreement, Chembio acquired all of the
issued and outstanding common stock and other equity interests of
RVR from the Sellers for (i) a cash payment of $1,400,000 and
(ii) 269,236 shares of Chembio’s common stock, of which 7,277
shares are being held back to satisfy certain potential claims
under the Stock Purchase Agreement and will become issuable to
the Sellers, if at all, on the one-year anniversary of the
closing.
In addition, the Stock Purchase Agreement provides that the
Sellers may become entitled to receive certain milestone payments
based on the achievement of performance goals related to sales by
RVR during the 12 months ending December 31, 2017. RVR’s actual
sales during such period will be used to determine the
“Milestone Proration Amount,” which is a fraction that (i) the
numerator of which is the positive amount, if any, by which
actual sales for calendar year 2017 are greater than $2,250,000,
up to a maximum overage of $250,000, and (ii) the denominator of
which is $250,000. Based on the actual sales achieved by RVR, the
Sellers will be entitled to receive (i) a cash milestone payment
equal to $100,000 multiplied by the Milestone Proration Amount,
for a maximum cash milestone payment of $100,000, and (ii) a
stock milestone payment equal to 21,830 shares of Chembio common
stock multiplied by the Milestone Proration Amount, with a
maximum stock milestone payment of 21,830 shares of Chembio
common stock.
The foregoing description of the Stock Purchase Agreement does
not purport to be complete and is qualified in its entirety by
reference to the full text of the Stock Purchase Agreement, a
copy of which is attached hereto as Exhibit 2.1 and is
incorporated by reference herein.
Employment Agreements and RVR Director Appointments
In connection with the closing of the transaction under the Stock
Purchase Agreement, each of the Sellers entered into an
employment agreement with RVR, to which, among other things, each
of the Sellers agreed to serve as an employee of RVR for the
one-year period following the closing in exchange for a monthly
base salary of $10,000. In addition, at the closing, John J.
Sperzel III, Chembio’s President, Chief Executive Officer and a
member of Chembio’s board of directors, Richard J. Larkin,
Chembio’s Chief Financial Officer and Executive Vice President,
and Katherine L. Davis, Chembio’s Chairman of the Board and a
member of Chembio’s board of directors, were appointed as the
directors of RVR, with each of the Sellers continuing as the
other two directors of RVR.
Other Material Relationships
As previously disclosed in Chembio’s filings with the Securities
and Exchange Commission, Chembio and RVR are also parties to
agreements entered into in 2013 and 2014 that grant exclusive
distribution rights to RVR in certain countries in Asia and that
enable RVR to manufacture certain Chembio products.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure set forth under the heading “Stock Purchase
Agreement” in Item 2.01 of this Current Report on Form 8-K is
incorporated by reference herein. The issuance of the shares of
Chembio common stock in connection with the acquisition of RVR
was exempt from the registration requirements of the Securities
Act of 1933, as amended, to Section 4(a)(2) thereof as a
transaction by an issuer not involving any public offering.
Item 7.01 Regulation FD Disclosure.
On January 10, 2017, Chembio issued a press release entitled
“Chembio Completes Acquisition of Malaysia-based RVR
Diagnostics.” A copy of the press release is furnished herewith
as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
|
2.1 |
Amended And Restated Stock Purchase Agreement, dated as of December 7, 2016, by and among Chembio Diagnostics, Inc., RVR Diagnostics Sdn Bhd, Avijit Roy and Magentiren Vajuram. |
|
99.1 |
Press Release entitled “Chembio Completes Acquisition of Malaysia-based RVR Diagnostics” dated January 10, 2017. |
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
John J. Sperzel III
Chief Executive Officer
EXHIBIT INDEX
|
Exhibit No. |
Description |
|
2.1 |
Amended And Restated Stock Purchase Agreement, dated as of December 7, 2016, by and among Chembio Diagnostics, Inc., RVR Diagnostics Sdn Bhd, Avijit Roy and Magentiren Vajuram.* |
|
99.1 |
Press Release entitled “Chembio Completes Acquisition of Malaysia-based RVR Diagnostics” dated January 10, 2017. |
* Schedules and exhibits have been omitted
About CHEMBIO DIAGNOSTICS, INC. (NASDAQ:CEMI)
Chembio Diagnostics, Inc. (Chembio), and its subsidiary, Chembio Diagnostic Systems, Inc., develop, manufacture, market and license rapid point-of-care diagnostic tests (POCTs) that detect infectious diseases. The Company’s products available are rapid tests for the detection of human immunodeficiency virus (HIV) 1/2 antibodies, and a multiplex rapid test for the detection of HIV and Syphilis antibodies. The HIV 1/2 rapid tests employ in-licensed and lateral flow technologies that are used with all blood matrices as samples, and are manufactured in a standard cassette format, a dipstick format and a barrel format. Its HIV 1/2 rapid antibody detection test incorporates the Dual Path Platform (DPP) POCT technology. The DPP HIV 1/2 Assay detects antibodies to HIV 1 and 2 in oral fluid samples, as well as in all blood matrices. The Company’s product pipeline includes a multiplex rapid test for earlier detection of HIV and a multiplex test that detects HIV and Syphilis specific antibodies. CHEMBIO DIAGNOSTICS, INC. (NASDAQ:CEMI) Recent Trading Information
CHEMBIO DIAGNOSTICS, INC. (NASDAQ:CEMI) closed its last trading session up +0.10 at 6.35 with 13,337 shares trading hands.
