Diomed (AMEX:DIO)
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From Jun 2019 to Jun 2024
Diomed Holdings, Inc. (AMEX: DIO),
a leading developer and marketer of minimally invasive medical
technologies, including its patented EVLT®
laser treatment for varicose veins, announced that it, together with its
wholly owned subsidiary, Diomed, Inc., filed a voluntary petition under
Chapter 11 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Massachusetts, Western Division.
The petition contemplates that Diomed will sell certain of its operating
assets to Biolitec AG, a manufacturer of medical lasers, optical fibers
and other products, thereby enabling Biolitec to continue to operate
Diomed’s business in the United States.
Diomed and Biolitec have entered into a non-binding letter of intent for
the sale of specified assets for a purchase price of between $6 and $7
million. Biolitec reported revenues of €39
million and profits of €5.6 for its fiscal
year ended June 30, 2007. Its shares are listed on the Prime Standard of
the Frankfurt Stock Exchange. Biolitec is headquarted in Jena, Germany,
and employs approximately 60 personnel at its U.S. operations based in
East Longmeadow, Massachusetts.
“The decision to pursue the sale of the company’s
assets and operations through the bankruptcy process was an extremely
difficult but appropriate decision for our Board of Directors to make,”
commented James A. Wylie, Jr., Diomed’s Chief
Executive Officer. “In spite of our intensive
efforts to seek a buyer for the Company outside of bankruptcy and to
work with our secured lenders to avoid seeking bankruptcy protection,
the impact of infringement of the Company’s
products in the marketplace and delays in the judicial process proved
impossible to overcome,” Wylie stated. “We
believe that, given the ongoing financial and legal challenges facing
Diomed, bankruptcy is the best means available to protect the company’s
assets and allow the company’s operations to
be sold through an orderly process.”
With court approval, Diomed will continue operating in the ordinary
course of business as a debtor-in-possession while it pursues the sale
of specified assets to Biolitec and the sale of its other assets to
third parties. Diomed expects to complete the asset sale to Biolitec
within approximately 60 to 90 days and to sell its remaining assets in
due course, under the court’s direction.
These other assets include judgments in Diomed’s
favor of approximately $14.7 million arising from Diomed’s
successful patent infringement litigation in 2007 against defendants
AngioDynamics, Inc. and Vascular Solutions, Inc. This litigation is
currently on appeal, under bond, with a hearing on the appeal scheduled
for April 10, 2008 at the appellate court.
Diomed and Biolitec have entered into a non-binding letter of intent for
the sale of specified assets. The letter of intent contemplates that to
fund its operations during bankruptcy, Diomed will use its cash and
receipts and will obtain debtor-in-possession financing from its senior
secured creditor, Hercules Technology Growth Capital, Inc. If Hercules
and Diomed are unable to reach agreement on the terms of such financing,
Biolitec has agreed in principle under the letter of intent to provide
necessary financing of up to $2 million during the transition period.
Such debtor-in-possession financing will be subject to court approval.
The proceeds of the sale of Diomed’s assets
will be distributed to Diomed’s creditors and
equity holders as determined by the bankruptcy court. With court
approval, Diomed expects to complete the asset sale to Biolitec within
approximately 60 to 90 days and to sell its remaining assets in due
course, under the court’s direction.
In a related development, Diomed’s wholly
owned subsidiary, Diomed Limited, has determined to file for
Administration locally under the laws of the United Kingdom,
contemporaneously with Diomed’s bankruptcy
filing in the United States.
“We believe that Biolitec’s
acquisition of Diomed’s operating assets and
U.S. sales and marketing organization provides our loyal physician
partners the best opportunity for an improved level of service, flow of
new and innovative technologies, and continuity of supply of lasers and
disposable products,” concluded Wylie. “Finally,
I would be remiss if I did not thank each and every employee of the
Company for their loyalty, dedication and commitment during the last
several months. They stood the course and performed above all
expectations during this very difficult time.”
About Diomed
Diomed develops and commercializes minimal and micro-invasive medical
procedures that use its proprietary laser technologies and disposable
products. Diomed’s EVLT®
laser vein ablation procedure is used in varicose vein treatments.
Diomed also provides photodynamic therapy (PDT) for use in cancer
treatments, and dental and general surgical applications. The EVLT®
procedure and the Company’s related products
were cleared by the United States FDA in January of 2002. Along with
lasers and single-use procedure kits for its EVLT®
laser vein treatment, the Company provides its customers with state of
the art physician training and practice development support. Additional
information is available on the Company’s
website: www.evlt.com.
EVLT® is a registered trademark of Diomed
Inc., Andover, MA.
Safe Harbor
Safe Harbor statements under the Private Securities Litigation Reform
Act of 1995: Statements in this news release looking forward in time
involve risks and uncertainties, including the risks associated with
trends in the products markets, reliance on third party distributors in
various countries outside the United States, reoccurring orders under
OEM contracts, market acceptance risks, technical development risks and
other risk factors. These statements relate to our future plans,
objectives, expectations and intentions. These statements may be
identified by the use of words such as "may," "will," "should,"
"potential," "expects," "anticipates," "intends," "plans," "believes"
and similar expressions. These statements are based on our current
beliefs, expectations and assumptions and are subject to a number of
risks and uncertainties.
Moreover, our bankruptcy filing in the United States and the concurrent
administration filing of our manufacturing subsidiary in the United
Kingdom raise significant concern as to the reliability going forward of
our previous and current forward-looking statements. The bankruptcy
process will require court approval of, among other things, the
contemplated acquisition of our operating assets by Biolitec AG and
debtor-in-possession financing. Further, given recent developments, our
actual results are likely to differ materially from those discussed in
our previous financial statements. Diomed disclaims any obligation or
duty to update or correct any of its forward-looking statements.