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SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 17, 1998--ChemTrak Inc. (OTC:CMTR) Tuesday announced that it has signed a letter of intent to sell all of its assets and operations, including its patents and licenses for all of its product lines with the exception of Parent's Alert Home Drug Test Service to Clinimetrics Research Associates Inc. of San Jose, Calif.
Under the terms of the letter of intent, Clinimetrics would assume certain liabilities and pay additional funds to the company. Proceeds of the sale are expected to satisfy the claims of secured creditors and a substantial amount of the unsecured creditors.
Implementing the agreement would require the company to proceed with a Chapter 11 reorganization prior to completing the agreement. The agreement is subject to the approval of ChemTrak's board of directors, its creditors' committee and bankruptcy court. Due diligence has begun and a definitive agreement is expected to be signed by Nov. 30, 1998.
"We believe this agreement offers our employees, suppliers, creditors, customers and shareholders the best possible outcome," said Edward F. Covell, president and CEO of ChemTrak.
ChemTrak has a range of products for home use that are available at all major chain drug and merchant outlets. ChemTrak's most recent addition to its over-the-counter line was the Parent's Alert Home Drug Test Service, a counselor-supported, home drug test service committed to helping parents prevent and eliminate drug use by their children.
This product line, originally licensed from Parents' Alert, was returned to Parents' Alert on Nov. 16, 1998, pursuant to an agreement with the creditors' committee.
The CholesTrak Home Cholesterol Test and the ColoCARE Home Test to Detect the Early Warning Signs of Colorectal Disease are both designed to help consumers take a more active role in their personal health care.
Located in Sunnyvale, ChemTrak is a medical diagnostics company offering reliable and easy-to-use medical testing systems for in-home use and use in doctors' offices. ChemTrak medical tests are designed to screen and diagnose health conditions with accuracy comparable to laboratory tests.
The statements in this release regarding products and revenues are forward-looking and subject to risk and uncertainty, and future results could differ materially from past performance. For a detailed discussion of factors that may affect the company's operating results, interested parties should review the company's Securities and Exchange Commission reports, including the ChemTrak Annual Report on 10-K for the year ended Dec. 31, 1997, filed with the SEC. |
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