Horsham’s PhotoMedex Nixes $48 Million Merger
PhotoMedex, Horsham’s maker of no! no! hair removal products, filed documents with the SEC on Tuesday, calling off its $48 million merger with DS Healthcare, writes John George for the Philadelphia Business Journal.
The skin-care products company has also filed a complaint against DS Healthcare with the U.S. District Court in New York, alleging failures and breaches by DS in connection with the merger. PhotoMedex is seeking a termination fee of $3.0 million, reimbursement of expenses of up to $750,000, plus liabilities and damages.
The company entered into a definitive agreement to merge with Florida-based DS in February. The deal would have given its shareholders $20 million in convertible preferred stock, together with a $4.5 million note, and 8.75 million shares of common stock.
PhotoMedex alleges in the lawsuit, that DS Healthcare did not disclose until March that its unaudited condensed consolidated financial statements for the two consecutive fiscal quarters ending September 30, 2015 “should no longer be relied upon because of certain errors.”
DS Healthcare also disclosed later that same month that errors in their financial statements had reduced the estimated unaudited 2015 fiscal year revenues by $900,000 to $13 million.
As a result, PhotoMedex also argues that normal business operations of DS Healthcare have ground to a halt, bringing the company’s stock substantially under the price that was negotiated in the merger deal.
Read more about the lawsuit in the Philadelphia Business Journal by clicking here.
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