ACOLYTE BIOMEDICA COURT JUDGEMENT

RNS Number : 6366R

Angle PLC

07 November 2011

 



For immediate release

7 November 2011

ANGLE plc ("the Company")

ACOLYTE BIOMEDICA COURT JUDGEMENT 

ANGLE plc (AIM: AGL) provides an update in respect of the deferred consideration due on the sale of its portfolio company Acolyte Biomedica Limited, which specialises in medical diagnostics / MRSA detection.

Acolyte was sold in February 2007 with ANGLE due an earn-out of up to £4.7 million receivable in early 2010.  The payment of the earn-out is subject to dispute between the former Acolyte shareholders and the purchaser.

The legal action by the former major Acolyte shareholder, Porton Capital, in the UK courts against the purchaser, 3M, in respect of its share of the earn-out concluded this morning when the judge handed down his judgement.

ANGLE is pleased that the judge found in favour of Porton Capital and in particular that 3M was:

(1) "in breach of its obligation diligently to seek regulatory approval for BacLite in the US"; and

(2) "in material breach of its obligation actively to market [BacLite]".

We are surprised however that the damages awarded against 3M were limited to only US $1,299,808, which on a comparable basis would equate to US $248,453 for ANGLE's earn-out.  We note that the damages were based on an assessment by the judge of the level of 2009 sales, which would have been achieved if 3M had not breached the SPA (sales purchase agreement).  This assessment appears to be much lower than might have been the case had BacLite been successful in the market.     

We intend to await any possible further developments, prior to approaching 3M in relation to settlement of our outstanding earn-out.

On the basis of this judgement, the potential level of settlement is lower than ANGLE's current balance sheet valuation of the earn out of £1.5 million.  ANGLE will need to consider the balance sheet value of the earn out in the light of the judgement and any further developments particularly in regard to the level of damages awarded and it is likely that there will be an impairment of this carrying value. 

ANGLE made the decision not to commit capital to pursue this case and we are therefore not subject to any legal costs.  ANGLE's business plan is not dependent on this settlement and any payment from 3M would be additional to current cashflow plans.

Management are encouraged by the recent progress made with Parsortix and Geomerics. ANGLE has recently validated the capability of the Parsortix technology to separate cancer cells from human blood and the Geomerics' Enlighten lighting technology has won critical acclaim in the recently released Battlefield3 computer game.  We look forward to the potential for further positive developments in the near term.

For further information: 

ANGLE plc	01483 685830
Andrew Newland, Chief Executive Ian Griffiths, Finance Director
Collins Stewart Europe Limited Matt Goode	0207 523 8350
Buchanan Lisa Baderoon	0207 466 5000
Scott Harris Stephen Scott, Harry Dee	0207 653 0030

 

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