Under the terms of the termination agreement, in addition to the termination of the original distribution agreement with EDAP, HealthTronics exercised warrants to acquire 200,000 EDAP shares for $300,000 and agreed to return to EDAP two Ablatherm devices used in connection with the clinical study, both of which were already owned by EDAP, and one Ablatherm device and six lithotripters previously acquired from EDAP (all of which were carried on HealthTronics’ financial statements at zero value). In addition, EDAP agreed to register with the Securities and Exchange Commission, at EDAP’s expense, the resale of the 200,000 EDAP shares (or related American Depositary Shares) acquired by HealthTronics. HealthTronics also agreed to pay EDAP $600,000 in the future and may have to pay EDAP certain additional amounts in the future based on a formula related to the price at which HealthTronics resells the EDAP shares.
Sam B. Humphries, President and Chief Executive Officer, stated, “We are very pleased to transition the clinical study to EDAP. As I had previously discussed in the fourth quarter of 2006, the termination of our relationship with EDAP is part of our restructuring and cost-reduction initiatives implemented in 2006, as well as the redefinition of our long range strategy. We expect that the termination of the relationship with EDAP will not impact our P&L or our cash position, assuming and taking into account our sale of the 200,000 EDAP shares at current prices.” |
