After about 15 months of discussions, Abviva entered into a letter of intent (LoI) to acquire Prion Developmental Laboratories (PDL) from Efoora, PDL’s majority owner.
Efoora has been under SEC investigation since the middle of 2006 for participating in an unregistered and fraudulent offering of its stock. Since that time, minority shareholder Abviva has been attempting to gain control of PDL and its assets in diagnostic and food-safety monitoring tests for human and animal diseases caused by prions.
Abviva originally signed an LoI on July 25, 2006 to buy all of PDL’s assets. On July 27, 2006, however, the SEC issued a freeze order on certain Efoora assets, which extended to some of PDL’s assets.
The freeze order was made in conjunction with the SEC’s actions against Efoora, which began on June 29, 2006. The complaint stated that from at least January 2000 through April 2006, Efoora raised approximately $40 million through an offering that was not registered with the commission and by soliciting investors by making false or misleading statements about Efoora’s business. The SEC said that in this period over 100 million shares of its stock were sold to about 5,000 investors.
The firm, its former CEO, David S. Grosky, a company controlled by Grosky called Partners Holding, a resident of Highland Park, and another Efoora employee Melvin S. Dokich were implicated.
The SEC, on June 20 of this year, filed a motion to appoint a receiver for Efoora to facilitate a takeover of PDL. The motion was subsequently approved by the court. Discussions commenced between Abviva and the receiver, leading to the signing of an LoI, effective November 27.
“We are very pleased that the receiver has agreed to allow us to continue with the acquisition of PDL under the terms and conditions we agreed to in the Letter of Intent,” comments Douglas C. Lane, Abviva president and CEO.
“During the last seventeen months since we learned of the asset freeze of PDL and Efoora we have worked diligently to preserve PDL and its BSE Rapid Assay product opportunity. Though we were a minority shareholder it was obvious to us that if we did not take the senior support and management responsibility for PDL the company and our substantial investments in the company and the products would be lost.”