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news.Martek Biosciences Corporation has reached a settlement with the representative of the former stockholders of OmegaTech in an ongoing litigation regarding the disputed contingent consideration associated with certain milestones included in merger agreement.
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In connection with the settlement, Martek will issue 341,061 shares of common stock to the former stockholders of OmegaTech, which represents approximately one-half the amount of shares that would have been issued for the achievement of the regulatory milestone merger agreement. As part of the settlement, the litigation will be dismissed and Martek will receive a full release and discharge from any and all future claims by former stockholders of OmegaTech.
As per merger agreement, Martek had been reserving 1.9 million shares in order to satisfy its potential purchase price obligations relative to the remaining milestones. This settlement for shares eliminates the potential for any additional shares to be issued to the former OmegaTech stockholders. Martek’s payment of shares to the former OmegaTech securities holders will result in the recognition of approximately $10 million of additional goodwill by Martek when the shares are issued. Martek has agreed to file a registration statement with the Securities and Exchange Commission to permit the resale of the shares and to maintain the effectiveness of the registration statement for a period of two years.