UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
washington,
d.c. 20549
|
FORM
8-K
|
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): February 17,
2010
_______________________
CRYOLIFE,
INC.
(Exact
name of registrant as specified in its charter)
_________________________
|
Florida
|
1-13165
|
59-2417093
|
|
(State
or Other Jurisdiction
of
Incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
1655
Roberts Boulevard, N.W., Kennesaw, Georgia 30144
(Address
of principal executive office) (zip code)
Registrant's
telephone number, including area code: (770) 419-3355
_____________________________________________________________
(Former
name or former address, if changed since last report)
_________________________
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of
the registrant under any of the following provisions (see General Instruction
A.2. below):
|
x
|
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|
|
q
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
o
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
|
|
o
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Section 8 Other Events
Item 8.01 Other Events.
On February 17, 2010, CryoLife, Inc.
(“CryoLife”) delivered a letter to the Board of Directors of Medafor, Inc.
(“Medafor”) and issued a press release regarding the same. These
documents are available at www.cryolife.com/medaforoffer
and/or have otherwise been disseminated by CryoLife. The letter to
the Medafor Board and the press release dated February 17, 2010 are attached
hereto as Exhibits 99.1 and 99.2, respectively.
This filing and the exhibits
hereto are provided for informational purposes only and are not offers to
purchase nor a solicitation of offers to sell shares of Medafor or CryoLife.
Subject to future developments, CryoLife may file a registration statement
and/or tender offer documents and/or proxy statement with the SEC in connection
with the proposed combination. Shareholders should read those
filings, and any other filings made by CryoLife with the SEC in connection with
the combination, as they will contain important information. Those
documents, if and when filed, as well as CryoLife’s other public filings with
the SEC, may be obtained without charge at the SEC’s website at www.sec.gov and
at CryoLife’s website at www.cryolife.com.
Section
9 Financial
Statements and Exhibits
Item
9.01(d) Exhibits.
(a)
Financial Statements.
Not applicable.
(b) Pro
Forma Financial Information.
Not applicable.
(c) Shell
Company Transactions.
Not applicable.
(d)
Exhibits.
|
Exhibit Number
|
Description
|
|
|
99.1
|
Letter
to the Medafor Board
|
|
|
99.2
|
Press
Release dated February 17, 2010
|
-2-
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, CryoLife, Inc. has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| CRYOLIFE, INC. | |||
|
Date: February
17, 2010
|
By:
|
/s/ D.A. Lee | |
| Name: | D. Ashley Lee | ||
| Title: | Executive Vice President, Chief | ||
| Operating Officer and Chief | |||
| Financial Officer | |||
-3-
EXHIBIT 99.1
February
16, 2010
VIA
FEDEX
Michael
F. Pasquale, Chairman of the Board
Medafor,
Inc.
Dear
Michael,
As Medafor’s largest shareholder,
CryoLife is deeply disappointed to learn that Medafor’s board of directors has
rejected our $2.00 per share offer and refused to engage in discussions and
negotiations that could lead to a higher offer.
As we have stated previously, CryoLife
believes that our current proposal represents a full and fair offer for the
common stock of Medafor based on our review of the information available to
us. That said, we stand ready to negotiate with Medafor management in
good faith in order to develop an appreciation for the various business
opportunities mentioned in your recent letter. We have repeatedly
expressed our willingness to reconsider our current proposal if provided with
credible evidence that there is greater value in your business that we have not
adequately recognized. Unfortunately, to date, you have categorically
refused to engage with us in order to educate us on the potential value of
Medafor’s future prospects.
The Medafor board’s current stance
denies Medafor shareholders the opportunity to even explore the potential of a
business combination with CryoLife. In addition, nowhere in your
letter do you mention the possibility of exploring a business combination with
an alternative party as a means of maximizing value for your
shareholders. This position seems inconsistent with your assertion
that the board of Medafor takes its fiduciary responsibilities
seriously. In fact, your refusal to engage in discussions with us and
your single-minded determination to remain an independent company without
adequate exploration of other alternatives are more consistent with a strategy
of management and board entrenchment.
We also challenge your characterization
of CryoLife’s earnings prospects. Your opinions run counter to the
guidance we have previously provided to our investors and the consensus reached
by the medical device financial analysts who cover our stock. We
would welcome the opportunity to discuss our outlook for our company with you in
more detail, including our detailed projections regarding our business should
you be willing to enter in discussions with us under a non-disclosure agreement,
which is customary in these types of discussions.
We are also concerned by a number of
other misleading and inaccurate assertions contained in your
letter. We feel it is appropriate for us to clarify these assertions
so that our proposal may be appropriately evaluated by both Medafor’s board and
Medafor’s shareholders.
|
Medafor
Statement:
|
Sales to CryoLife represent
approximately 20% of Medafor’s sales and are
limited to the cardiac market, only one of many market opportunities
available to Medafor. (Second sentence of Paragraph 7,
Page 1 of Medafor Letter to Shareholders dated February 10,
2010)
|
|
|
CryoLife
Comment:
|
This
statement is simply untrue, as CryoLife’s contractual rights extend beyond
the cardiac field. CryoLife has the exclusive right to sell the
MPH product into cardiac
and vascular surgeries in the United States (excluding DoD
facilities) and into cardiac, vascular and general
surgeries in the rest of the World (except China and Japan)
excluding ENT, orthopedic, neurosurgery and topical
applications.
|
|
|
Medafor
Statement:
|
While
CryoLife widely touts its sales force having what it reports to be $6
million in worldwide Hemostase sales, CryoLife fails to mention that
Medafor transferred a significant portion of that business in already
established sales. (Second sentence of Paragraph 4, Page 2 of
Medafor Letter to Shareholders dated February 10, 2010)
|
|
|
CryoLife
Comment:
|
This
statement is simply untrue. A significant portion of CryoLife’s
sales were generated from its own efforts, not from a transfer by Medafor
of established sales. In fact, while the litigation between
CryoLife and Medafor is unrelated to this process, part of our contention
in our lawsuit with Medafor is that the company did not transfer sales that they were required
to, that were our exclusive right.
|
|
|
Medafor
Statement:
|
Furthermore,
we have serious doubts about the outlook of CryoLife’s business and,
consequently, its ability to invest in the MPH
technology. (First sentence of Paragraph 1, Page 3 of
Medafor Letter to Shareholders dated, February 10,
2010)
|
|
|
CryoLife
Comment:
|
Unlike
Medafor, whose auditors expressed a “going concern” opinion in September
2009 with respect to its December 31, 2008 financials, CryoLife has a
strong balance sheet, with over $35 million in cash as of February 15,
2010 and a $15 million line of credit, with availability of approximately
$14.5 million. Because CryoLife is traded on the New York Stock
Exchange and because it is generating profits and cash flow, it has ready
access to both equity and debt
markets.
|
Please note that the comments
referenced above are only those we consider to be the most egregious of the
numerous inaccurate statements contained in Medafor’s response letter dated
February 10, 2010. Although we do not wish to engage in a letter
writing campaign about all of the inaccuracies in Medafor’s communications, as
we would rather focus our energies on putting together a friendly transaction
with Medafor, we cannot sit idly by when inaccurate or misleading statements are
made about our proposal or our business. We believe it is important
that Medafor’s shareholders are fully informed. As such, we intend to
include a section on our website at www.cryolife.com/medaforoffer,
which will correct any misinformation disseminated by Medafor or its
proxies. We expect that this section of the website will be available
by the end of the week.
We continue to believe that a
combination of our businesses makes compelling business sense for both companies
and is in the best interests of our respective shareholders. We
remain prepared to engage with Medafor in constructive and good faith
discussions to identify additional potential value. However, in light
of the board’s response and refusal to engage with us, we will consider all
options available to us, including our right to call a special meeting of
shareholders, commence a tender offer, or proceed with a proxy contest to
replace at least a majority of the Medafor directors. We are pleased
with the strong support we have received from Medafor shareholders for our
proposal and have heard many shareholders express their frustration with the
status quo and voice a
desire for change.
We hope you will reconsider your
decision not to engage in discussions with us, and we reiterate our commitment
to employ all means available to deliver full and fair value to all Medafor
shareholders.
Sincerely,
/s/
Steven G. Anderson
Steven G.
Anderson
President,
CEO and Chairman of the Board
cc: Board
of Directors of Medafor
Gary J. Shope
ADDITIONAL
IMPORTANT INFORMATION
This
announcement is provided for informational purposes only and is not an offer to
purchase nor a solicitation of an offer to sell shares of Medafor or
CryoLife. Subject to future developments, CryoLife may file a
registration statement and/or tender offer documents and/or proxy statement with
the SEC in connection with the proposed combination. Shareholders
should read those filings, and any other filings made by CryoLife with the SEC
in connection with the combination, as they will contain important
information. Those documents, if and when filed, as well as
CryoLife’s other public filings with the SEC, may be obtained without charge at
the SEC’s website at www.sec.gov and at CryoLife’s website at
www.cryolife.com.
EXHIBIT 99.2
N
E W S R E L E A S E
FOR
IMMEDIATE RELEASE
Media
Contacts:
D. Ashley
Lee
Executive
Vice President, Chief Financial Officer and
Chief
Operating Officer
Phone:
770-419-3355
Nina
Devlin
Edelman
Phone:
212-704-8145
CryoLife
Sends Letter to Medafor, Inc. Board of Directors
ATLANTA, GA (February 17, 2010) --
CryoLife, Inc. (NYSE: CRY), an implantable biological medical device and
cardiovascular tissue processing company, announced today that it has sent the
following letter to Medafor’s Board of Directors:
February
16, 2010
VIA
FEDEX
Michael
F. Pasquale, Chairman of the Board
Medafor,
Inc.
Dear
Michael,
As Medafor’s largest shareholder,
CryoLife is deeply disappointed to learn that Medafor’s board of directors has
rejected our $2.00 per share offer and refused to engage in discussions and
negotiations that could lead to a higher offer.
As we have stated previously, CryoLife
believes that our current proposal represents a full and fair offer for the
common stock of Medafor based on our review of the information available to
us. That said, we stand ready to negotiate with Medafor management in
good faith in order to develop an appreciation for the various business
opportunities mentioned in your recent letter. We have repeatedly
expressed our willingness to reconsider our current proposal if provided with
credible evidence that there is greater value in your business that we have not
adequately recognized. Unfortunately, to date, you have categorically
refused to engage with us in order to educate us on the potential value of
Medafor’s future prospects.
The Medafor board’s current stance
denies Medafor shareholders the opportunity to even explore the potential of a
business combination with CryoLife. In addition, nowhere in your
letter do you mention the possibility of exploring a business combination with
an alternative party as a means of maximizing value for your
shareholders. This position seems inconsistent with your assertion
that the board of Medafor takes its fiduciary responsibilities
seriously. In fact, your refusal to engage in discussions with us and
your single-minded determination to remain an independent company without
adequate exploration of other alternatives are more consistent with a strategy
of management and board entrenchment.
We also challenge your characterization
of CryoLife’s earnings prospects. Your opinions run counter to the
guidance we have previously provided to our investors and the consensus reached
by the medical device financial analysts who cover our stock. We
would welcome the opportunity to discuss our outlook for our company with you in
more detail, including our detailed projections regarding our business should
you be willing to enter in discussions with us under a non-disclosure agreement,
which is customary in these types of discussions.
We are also concerned by a number of
other misleading and inaccurate assertions contained in your
letter. We feel it is appropriate for us to clarify these assertions
so that our proposal may be appropriately evaluated by both Medafor’s board and
Medafor’s shareholders.
|
Medafor
Statement:
|
Sales to CryoLife represent
approximately 20% of Medafor’s sales and are
limited to the cardiac market, only one of many market opportunities
available to Medafor. (Second sentence of Paragraph 7,
Page 1 of Medafor Letter to Shareholders dated February 10,
2010)
|
|
|
CryoLife
Comment:
|
This
statement is simply untrue, as CryoLife’s contractual rights extend beyond
the cardiac field. CryoLife has the exclusive right to sell the
MPH product into cardiac
and vascular surgeries in the United States (excluding DoD
facilities) and into cardiac, vascular and general
surgeries in the rest of the World (except China and Japan)
excluding ENT, orthopedic, neurosurgery and topical
applications.
|
|
|
Medafor
Statement:
|
While
CryoLife widely touts its sales force having what it reports to be $6
million in worldwide Hemostase sales, CryoLife fails to mention that
Medafor transferred a significant portion of that business in already
established sales. (Second sentence of Paragraph 4, Page 2 of
Medafor Letter to Shareholders dated February 10, 2010)
|
|
|
CryoLife
Comment:
|
This
statement is simply untrue. A significant portion of CryoLife’s
sales were generated from its own efforts, not from a transfer by Medafor
of established sales. In fact, while the litigation between
CryoLife and Medafor is unrelated to this process, part of our contention
in our lawsuit with Medafor is that the company did not transfer sales that they were required
to, that were our exclusive right.
|
|
|
Medafor
Statement:
|
Furthermore,
we have serious doubts about the outlook of CryoLife’s business and,
consequently, its ability to invest in the MPH
technology. (First sentence of Paragraph 1, Page 3 of
Medafor Letter to Shareholders dated, February 10,
2010)
|
|
|
CryoLife
Comment:
|
Unlike
Medafor, whose auditors expressed a “going concern” opinion in September
2009 with respect to its December 31, 2008 financials, CryoLife has a
strong balance sheet, with over $35 million in cash as of February 15,
2010 and a $15 million line of credit, with availability of approximately
$14.5 million. Because CryoLife is traded on the New York Stock
Exchange and because it is generating profits and cash flow, it has ready
access to both equity and debt
markets.
|
Please note that the comments
referenced above are only those we consider to be the most egregious of the
numerous inaccurate statements contained in Medafor’s response letter dated
February 10, 2010. Although we do not wish to engage in a letter
writing campaign about all of the inaccuracies in Medafor’s communications, as
we would rather focus our energies on putting together a friendly transaction
with Medafor, we cannot sit idly by when inaccurate or misleading statements are
made about our proposal or our business. We believe it is important
that Medafor’s shareholders are fully informed. As such, we intend to
include a section on our website at www.cryolife.com/medaforoffer,
which will correct any misinformation disseminated by Medafor or its
proxies. We expect that this section of the website will be available
by the end of the week.
We continue to believe that a
combination of our businesses makes compelling business sense for both companies
and is in the best interests of our respective shareholders. We
remain prepared to engage with Medafor in constructive and good faith
discussions to identify additional potential value. However, in light
of the board’s response and refusal to engage with us, we will consider all
options available to us, including our right to call a special meeting of
shareholders, commence a tender offer, or proceed with a proxy contest to
replace at least a majority of the Medafor directors. We are pleased
with the strong support we have received from Medafor shareholders for our
proposal and have heard many shareholders express their frustration with the
status quo and voice a
desire for change.
We hope you will reconsider your
decision not to engage in discussions with us, and we reiterate our commitment
to employ all means available to deliver full and fair value to all Medafor
shareholders.
Sincerely,
/s/
Steven G. Anderson
Steven G.
Anderson
President,
CEO and Chairman of the Board
cc: Board
of Directors of Medafor
Gary J. Shope
ADDITIONAL
IMPORTANT INFORMATION
This
announcement is provided for informational purposes only and is not an offer to
purchase nor a solicitation of an offer to sell shares of Medafor or
CryoLife. Subject to future developments, CryoLife may file a
registration statement and/or tender offer documents and/or proxy statement with
the SEC in connection with the proposed combination. Shareholders
should read those filings, and any other filings made by CryoLife with the SEC
in connection with the combination, as they will contain important
information. Those documents, if and when filed, as well as
CryoLife’s other public filings with the SEC, may be obtained without charge at
the SEC’s website at www.sec.gov and at CryoLife’s website at
www.cryolife.com.
About
CryoLife, Inc.
Founded
in 1984, CryoLife, Inc. is a leader in the processing and distribution of
implantable living human tissues for use in cardiac and vascular surgeries
throughout the U.S. and Canada. The Company's CryoValve® SG
pulmonary heart valve, processed using CryoLife's proprietary SynerGraft®
technology, has FDA 510(k) clearance for the replacement of diseased, damaged,
malformed, or malfunctioning native or prosthetic pulmonary
valves. The Company’s CryoPatch® SG
pulmonary cardiac patch has FDA 510(k) clearance for the repair or
reconstruction of the right ventricular outflow tract (RVOT), which is a surgery
commonly performed in children with congenital heart defects, such as Tetralogy
of Fallot, Truncus Arteriosus, and Pulmonary Atresia. CryoPatch SG is
distributed in three anatomic configurations: pulmonary hemi-artery, pulmonary
trunk, and pulmonary branch. The Company's BioGlue®
Surgical Adhesive is FDA approved as an adjunct to sutures and staples for use
in adult patients in open surgical repair of large vessels. BioGlue
is also CE marked in the European Community and approved in Canada and Australia
for use in soft tissue repair. The Company's BioFoam®
Surgical Matrix is CE marked in the European Community for use as an adjunct in
the sealing of abdominal parenchymal tissues (liver and spleen) when cessation
of bleeding by ligature or other conventional methods is ineffective or
impractical. BIOGLUE Aesthetic®
Medical Adhesive is CE marked in the European Community for periosteal fixation
following endoscopic browplasty (brow lift) in reconstructive plastic surgery
and is distributed by a third party for this indication. CryoLife
distributes HemoStase®, a
hemostatic agent, in much of the U.S. for use in cardiac and vascular surgery
and in many international markets for cardiac, vascular, and general surgery,
subject to certain exclusions.
For
additional information about the company, visit CryoLife’s Web
site:
www.cryolife.com.
END