From the 10K filed 6-18-98>>[21] On July 19, 1996, BRLI completed the purchase from SmithKline Beecham
Clinical Laboratories, Inc. ("SBCL") of certain assets, rights and associated
goodwill including the Customer List related to SBCL's operation of its Renal
Dialysis Testing Business. The purchase price was $1,800,000 of which
$1,200,000 was paid at the Closing. The $600,000 balance was payable in 24
consecutive monthly installments of $25,000 commencing January 1, 1997.
Interest was imputed at the prime rate. At January 31, 1997, the outstanding
debt balance was $551,373. At the Closing, SBCL agreed for a three-year period
commencing no more than 120 days after the Closing, to cease performing renal
dialysis clinical laboratory testing services for renal dialysis centers or
other entities which provide diagnosis and/or treatment to dialysis patients.
Funding for the $1,200,000 down payment made by BRLI at the Closing was provided
pursuant to its term loan and credit line facilities with Midlantic Bank, N.A.
The Company estimated that approximately $1,000,000 in annual revenues could be
generated by this acquisition. (See Note 22)
[22] On December 30, 1996, the Company commenced a lawsuit against SmithKline
Beecham Clinical Laboratories ["SBCL"] alleging that SBCL materially and
repeatedly breached its obligations and its representations and warranties made
in the Asset Sale/Purchase Agreement and the Non-Competition Agreement between
the parties and claimed unspecified amounts of compensatory and punitive damages
and related costs. This lawsuit is in its initial stages and no assurances can
be given at this time that it will be concluded in the Company's favor. As a
result of its allegations against SBCL, the Company has not made any payments
with respect to the $600,000 note payable issued in connection with the
purchase.
This lawsuit may be worth several dollars per share if Bio wins. This is the "kicker" |
