|MiMedx Provides Update on Litigation with Terminated Employees|
As previously disclosed in the Company's quarterly report on Form 10-Q as filed with the
In response, these former employees sued the Company and the Company's Chairman and Chief Executive Officer. In their lawsuits, the former employees claimed, among other things, that the Company terminated their employment in retaliation for their complaints about the Company's alleged business practices. It appears that those allegations were designed to intimidate the Company into eliminating the former employees' non-competition agreements and paying a large settlement.
As previously disclosed, all of these allegations were fully investigated over a three-month period by the Board of Directors and its Audit Committee and an external team, which included outside legal counsel, the Company's independent auditors, and a nationally-recognized expert on revenue recognition. No credible evidence of incorrect processes, procedures or wrongdoing by the Company or
The cases involving the terminated employees have now proceeded to the discovery phase of litigation. In discovery, the Company has been successful in identifying additional evidence that the terminated employees violated their restrictive covenants, and that their counterclaims lack merit.
Two terminated employees admitted in sworn declarations to selling competitive products to
Further, one terminated employee admitted that his "channel stuffing" allegation is based on the fact that he heard from other people that the
Finally, one terminated employee admitted he has been dishonest. He admitted that he was actually lying in various emails regarding his sales activities. Additionally, he testified that he told one other terminated employee to lie to VA doctors about whether or not he would get commissions for selling to them a competing product. Moreover, that terminated employee admitted that he kept his limited liability company a secret from
Additionally, the Company has become aware of a recent "short-sale thesis" suggesting improprieties in certain VA procurement documents. The Company understands that it has been suggested that a
These civil cases are proceeding at a rapid pace toward trial and/or settlement; however, certain of these terminated employees are continuing their attempts to publicly defame the Company through misinformation, which has resulted in tortious interference civil actions taken against some of these individuals, and potentially further tortious interference civil actions against the others involved in the spread of fabricated information.
MiMedx® is a biopharmaceutical company developing and marketing regenerative biologics utilizing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. "Innovations in Regenerative Medicine" is the framework behind our mission to give physicians products and tissues to help the body heal itself. We process the human placental tissue utilizing our proprietary PURION® Process among other processes, to produce safe and effective allografts.
Important Cautionary Statement
This press release includes forward-looking statements, including statements regarding pending litigation, prospective litigation, and the impact of prior allegations. These statements also may be identified by words such as "believe," "except," "may," "plan," "potential," "will" and similar expressions, and are based on our current beliefs and expectations. Forward-looking statements are subject to significant risks and uncertainties, and we caution investors against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Among the risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements include the risk that triers of fact may rule against the Company, or that additional facts will be discovered which alter prior conclusions. For additional risks that might affect the Company, please review the Risk Factors section of our most recent annual report or quarterly report filed with the Securities and Exchange Commission. Any forward-looking statements speak only as of the date of this press release and we assume no obligation to update any forward-looking statement.
Investor Contact: COCKRELL GROUP, Rich Cockrell, 877-889-1972, email@example.com, cockrellgroup.com; Press Release Contact: Michael Senken, Phone: (770) 651-9100