Release of escrow shares

 9th Nov 2015

EKF Diagnostics Holdings plc (AIM: EKF), the point-of-care, central laboratory, and molecular diagnostics business, announces that further to its announcement on 20 March 2014 of the acquisition of Selah Genomics, Inc, the Company has entered into an agreement with the majority of the former shareholders of Selah (Majority Shareholders) under which the Majority Shareholders release to EKF certain shares in EKF that had been issued as part of the consideration but held in escrow (Escrow Shares), and also to waive the right to receive any future earnout consideration (Earnout Shares) and EKF agrees to waive any potential claims against the Majority Shareholders (the Agreement).

The Agreement has been signed by the Majority Shareholders who had the right to receive 96.5% of the Escrow Shares and 96.5% of any further Earnout Shares.

In accordance with the Plan of Merger Agreement dated 20 March 2014 (Merger Agreement) an escrow account was established which contains 5,835,593 EKF shares. The escrow account was established to satisfy any post completion balances due to EKF and any potential warranty claims (Escrow Account).

5,630,032 of the shares held in the Escrow Account will now be sold, with the net proceeds of sale being remitted to EKF, or cancelled in due course.

The remainder of the 205,561 shares in the Escrow Account will be released to the shareholders in Selah who did not enter into the Agreement (Minority Shareholders).

To compensate EKF, the four largest Majority Shareholders will collectively either sell 205,561 shares in EKF held by them and transfer the net proceeds of sale to EKF or return them to the Company, free of payment, for cancellation.

The Majority Shareholders waive their entitlement to receive any future Earnout Shares.  If EKF is required to issue any Earnout Shares to the Minority Shareholders due to the revenue targets set out in the Merger Agreement being satisfied the four largest Majority Shareholders will indemnify EKF for the issue price of those additional Earnout Shares.

EKF under the terms of the Agreement has agreed to waive any warranty claims that it has or may have against the Majority Shareholders under the terms of the Merger Agreement.

EKF Diagnostics Holdings plc     

Tel: +44 (0) 29 2071 0570

David Evans, Executive Chairman
Julian Baines, CEO
Paul Foulger, Finance Director                          

Mob: +44 (0) 7740 084 452
Mob: +44 (0) 7788 420 859
Mob: +44 (0) 7710 989 255

Panmure Gordon (UK) Limited

Tel: 020 7886 2500

Robert Naylor (Corporate Finance)
Paul Fincham (Corporate Finance)
Karri Vuori (Corporate Finance)

 

Walbrook PR Limited 

Tel: 020 7933 8780 or ekf@walbrookpr.com

Paul McManus
Lianne Cawthorne

Mob: 07980 541 893
Mob: 07584 391 303