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|MiMedx Reports Further Developments in its Civil Litigation Against Former Employees|
Developments in Civil Litigation Against Terminated Employees
As previously communicated,
Petit continued, "Mr. Halunen made allegations last December on behalf of clients claiming that I stated in a meeting that I wanted to hurt these terminated individuals and their families. I would like to state unequivocally that I never made such a statement. What I did say took place in a meeting in which Mr. Fox and other sales managers and corporate executives were in attendance, and my statement was that I was saddened by the harmful impact these former employees' actions may have on them and their families. Presumably, this accusation was passed on to Mr. Halunen by Mr. Fox, and if appropriate steps were not taken to verify the accuracy of the statement, this is not only disappointing, but actionable."
In other depositions taken in the various former employee cases, one terminated employee retracted his channel stuffing allegations, and testified that all of the product at locations where he was assigned was used, none of it was returned, and future sales were not detrimentally impacted by his past sales volumes at any point. There has been evidence that some former employees hoped to be released from their non-compete agreements and that making allegations of channel-stuffing might allow them to negotiate such releases. A terminated employee formally withdrew his claim that he had previously filed with the National Labor Relations Board alleging he was fired for supporting the channel stuffing claims; this withdrawal ended that investigation. Additionally, several persons have indicated that numerous former employees were in discussions together regarding their involvement with companies other than
Additional evidence disclosed in litigation has confirmed that some of the terminated individuals provided gifts and meals to employees of the VA that potentially result in violations of federal law and
There has not been any testimony that the Company's executives directed anyone to behave in such a manner. All of the Company's compliance training and documentation is very clear on this issue. These facts make it appear that any individuals who engaged in this behavior not only disregarded their contractual obligations to
Petit stated, "Our litigation has progressed in an orderly fashion, and the conclusions that we originally reached are proving to be factual. I believe these civil actions will come to relatively quick conclusions. As previously stated, the Company is very comfortable with answering any questions related to these allegations and the misinformation association with them. We apologize for these distractions, but
Short Selling Theses Based on Allegations of Terminated Employees
The Company has also been made aware of various "short sell" theses that are based on the unfounded allegations of these terminated employees. If any of these short sell theses also involve information that was improperly obtained and traded on, or if the theses involve persons acting in concert to perpetuate false information to influence trading decisions, such activity is against the law. Recall that the
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. 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 risks of litigation, risk that triers of fact may rule against the Company, and that additional facts may be discovered which alter prior conclusions. For more detailed information on the risks that might affect the Company, please review the Risk Factors section of our most recent annual report or quarterly report filed with the
Investor Contact: COCKRELL GROUP, Rich Cockrell, 877-889-1972, firstname.lastname@example.org, cockrellgroup.com; PRESS RELEASE Contact: Michael Senken, Phone: (770) 651-9100